Jul 06

Jeff Bezos and Amazon have the advertising industry looking over its shoulder

When Jeff Bezos arrives as expected at the Sun Valley conference — the year’s most exclusive meeting of media industry leaders — he’ll know much more about his fellow media moguls than they know about him.

And that has them worried, especially as Amazon’s advertising business picks up.

Amazon’s growing advertising business is poised to challenge the stranglehold Google and Facebook have on the internet’s ad dollars, thanks to its growing dominance in e-commerce and growing presence in the media world.

Google knows what consumers are interested in, and Facebook knows who you are. But Amazon has what many in the advertising industry regard as the most important piece of the puzzle: what people buy. And the e-commerce giant is starting to capitalize on that data in a big way.

“It is definitely growing as a media company, but it is surging in terms of ad revenue,” said Advertising Age editor Brian Braiker. “The scary part for marketers is that [data] is all walled off, and if you want the special sauce you have to play by Amazon’s rules.”

Amazon still makes the bulk of its money through the sales of goods and its widely used cloud computing business, Amazon Web Services, but its advertising business is growing. In the first three months of 2018, Amazon reported revenue for its “other” segment, which is largely advertising, rose 139 percent, to $2 billion.

“What’s interesting is advertising is not their lead punch,” said Michael Kassan, founder of MediaLink, an advertising and media consultancy. “It is a tiny part of their revenue. It’s growing fast.”

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