The Boom of Amazon Advertising and Sponsored Search
As a college student away from home in the midst of a pandemic, what’s the cheapest, fastest, and easiest way to get anything you need? Just order it on Amazon! Most people probably think of Amazon as an online superstore for shipping products to your door, but there is a lot more to this e-commerce giant’s success than online orders. In the past few years, Amazon has been working to grow its advertising business by allowing vendors on the platform to pay for a higher ranking in search results or have their products displayed alongside another brand. In class we discussed this idea of sponsored search in the context of search engines, but Amazon has managed to capitalize on the popularity of their platform in the same way. This CNBC article breaks down the process that advertisers go through to purchase ad space on Amazon. Just as we discussed in class, vendors bid on specific keywords related to their products, with the most expensive keywords most likely to be seen by Amazon shoppers. In addition to the typical sponsored search advertising, which places certain products higher in suggested search results, Amazon also sells ad locations around search results and even on other product pages. With so many products thrown at you at one time, it can be hard to decide which product to buy. Should I go with the name brand or a sponsored product? The truth is that you might not know the difference.
One thing that sets Amazon advertisements apart from typical internet ads is that they can be very hard to identify to the untrained eye. According to the article, in a survey of about 2,000 Amazon shoppers, only half were able to tell the difference between an organic product display and a sponsored one. This is a good thing for Amazon, because at the end of the day, they sell more products and make additional advertising money. For the consumer, this raises serious questions about the ethics of sponsored search advertising. Is it fair to try and sell products to people when they don’t even know they’re being advertised to? Most customers would probably argue that they feel cheated or that they had the freedom to make their own decision taken from them. In response to this sentiment, Amazon would probably argue that you actually did choose the product you bought, even though you may have done it indirectly. Part of what makes Amazon’s advertising so powerful is their extensive customer data-collection practices, which they use to serve ads even more targeted towards individuals. Based on products you’ve searched, products you’ve ordered before, and even external data like your internet search history, Amazon can refine its advertisements to make you even more likely to click. The next time you think about clicking that “Add to Cart” button, take time to consider whether or not you’re getting the product you really want.
Source: https://www.cnbc.com/2019/07/17/how-amazon-advertising-works.html