Amazon.com is eyeing the online advertising market that has long been dominated by Google and Facebook and is quickly gaining momentum, reported The New York Times.
According to a report in The New York Times, the push on the part of Amazon to go after the online ad market means customers — including Prime members — are going to see ads in places they haven't seen them before on Amazon platforms. The report noted late last month gamers who use Amazon’s Twitch platform were upset when Twitch announced it wouldn’t be ad-free for Prime members anymore unless gamers paid $8.99 a month for a Twitch service dubbed Twitch Turbo. While Amazon makes most of its money on the eCommerce side of things, its other category — which consists of selling ads such as banner and display ads — grew around 130 percent in the first three months of 2018 compared with the first quarter of last year. Google and Facebook, meanwhile, account for more than half of the $88 billion digital ad marketplace.
Helping Amazon lure ad dollars its way is backlash from advertisers against Google and Facebook over data scandals and the placement of ads next to questionable content. “Google and Facebook have been slow to create the standards that advertisers want to see,” Collin Colburn, an analyst at the research and advisory firm Forrester, told The New York Times in the report. “They are concerned about what sort of content their ads are going to be placed next to.” He said Amazon is different because it’s more of a controlled platform. Amazon has sold ads for years, but analysts have noticed a pickup in the focus on that front, with the eCommerce giant increasing hiring and building out the capabilities so it can be a big, profitable business for Amazon. Advertisers are waking up to the fact that Amazon has a huge reach, with research firm Gartner L2 saying many large brands are increasing their advertising spend on Amazon this year including General Mills, Hershey and Unilever. Also, companies like Verizon, AT&T, and Geico, all of which don't sell consumer products, are advertising on Amazon's platform. “They have people who are in a shopping mind-set, so that’s valuable for Verizon to be seen as a resource within that mind-set,” said John Nitti, the chief media officer at Verizon, told NYT.