Amazon Collapses Sales Funnel

The shift to data-fueled ad buying is likely to have some unlikely results. One might be an ad world with completely new entrants. Amazon is now a candidate.

The e-commerce giant has dabbled in advertising previously, selling ads on sister site for example. It has also been a large online advertiser and a big player in affiliate marketing and seach ads. But now, it’s branching into the world of audience targeting with a deal to use Triggit’s data management platform.

What this means is Amazon can essentially move up the funnel for brands. It can start with its enormous trove of sales data, which it uses to personalize recommendations on its site, then go out through ad exchanges and direct to sites and find those audiences elsewhere for brands. This was a scenario Luma Partners CEO Terry Kawaja predicted in his sciencification of video presentation.

Of course, the question is whether Amazon is truly committed to being a big player in advertising or is just dabbling. If it commits fully — buying a demand-side platform, for instance — it could set off others in similar data positions, like eBay, of trying to become a new-style media company that doesn’t monetize audiences on its property but with its audience data.

LinkedIn and Ziff Davis are going this route on the publisher side. They can tap into their audience information and extend buys on other sites. Sites like Amazon and eBay, however, are working with transaction data, which is the most valuable. Amazon wouldn’t be limited to e-commerce data, however, considering it also owns movie site IMDB — retarget movie goers — and, a trove of valuable customer info for consumer-package-goods brands.

That is, if the benefits outweigh the costs. Companies like Amazon, which has direct financial relationships with tens of millions of consumers, could easily come under fire for using customer data in this way — even if such coop marketing is common in the analog world. EBay, for instance, pulled back its data from BlueKai earlier this year citing privacy concerns. Others say the real issue was the money it was getting for the data. EBay could easily jump back in the game, particularly now that it owns GSI Commerce.
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