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Amazon searches filled with ads?

Amazon has heavily taken to placing numerous advertising and sponsored posts in any given consumer search. This allows Amazon to make more money on top of the revenue it generates from its main purpose, selling and distributing goods to consumers. While ad revenue is not its biggest department, it is generating more and more revenue quickly. However, Amazon’s advertising techniques aren’t only in favor of the larger, more well-known companies; it showcases smaller companies’ products as well. This search advertising can also be seen when using Google, presumably where Amazon drew inspiration from. The search advertising has been increasingly successful for the company, as the percent of product page views that came from sponsored ads grew from around 3% to 8% in the span of about a year. Because Amazon’s success in advertising is growing, their cost per click is rising.

This relates to the concept of ad revenue and bidding for advertising space that was introduced in class. The rising cost per click and the success of their keyword searching advertising will have an effect on those bidding on advertising space on Amazon’s site and those bidders’ valuations of the space, namely increasing their valuations because of the success of the advertising space. Additionally, this relates somewhat to the concept of advertising based on search behavior, the company aiming to produce results that most closely fit the user’s needs and searches.


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November 2018