16 ms·

Amazon Sets Its Sights on the $88B Online Ad Market

280 points by extarial 8y ago

scarface74 8y ago
This is my bear case for Google. Google offers the least precise targeting compared to Facebook and Amazon. Facebook knows more about its users because users tell it about themselves and Amazon knows more about purchasing habits of its users because of thier purchase and search history. If I’m searching for something with the intention on buying it, I am going to go to the specific site - like Priceline, hotels.com, Zillow, etc. Besides, ad blockers don’t work with Facebook or Amazon embedded ads.
- nailer 8y ago
  > Besides, ad blockers don’t work with Facebook or Amazon embedded ads. Could you explain further? Do you mean A/FB ads on A/FB, or A/FB ads on third party sites? As long as they're marked as ads they're removable.
  - earenndil 8y ago
    > (I think Ad Blockers are off topic, they're still very niche for now) Didn't google have to provide a big refund to advertisers just due to adnauseum use?
    - decide 8y ago
      Ad blockers are used by 600m devices. 40% desktop 15%. Mobile (at least in the US) Happy to gather sources if you'd like, I searched this up a few days ago
      - nailer 8y ago
        What % of page views? I'd be surprised if it was more than 1%.
  - scarface74 8y ago
    Yes I am referring to ads on Facebook/Amazon.
- earenndil 8y ago
  > Besides, ad blockers don’t work with Facebook or Amazon embedded ads Don't they? They seem to work pretty well for google embedded ads.
  - scarface74 8y ago
    Exactly what I am saying. It’s much easier to block Google ads than Facebook or Amazon ads. Facebook ads are seen on thier site and in their apps as is Amazon’s. Google is not a “destination site” aside from YouTube.
    - earenndil 8y ago
      When I perform a google search for something with no adblocker on, 'sponsored results' show up -- google ads, on google's website. Adblockers hide these. How is this different from fb or amazon aads?
      - scarface74 8y ago
        The majority of users are using FB on mobile and the FB app is one of the most popular. Ad Blockers that most people are using on mobile - either via the built in content blocking framework on iOS or by using another browser on Android, don’t work on FB. FB uses “native ads” and “boosted content” that are indistinguishable from regular posts.
        bscphil 8y ago
        Even on desktop FB's ads are unblocked (or were when I used to have a FB account). They use a significant amount of obfuscation to make it impossible to use typical adblock techniques (url filter, css selectors, simple heuristics) without breaking the rest of the site. So far as I can tell most of the filter maintainers leave Facebook's native ads alone.
        earenndil 8y ago
        I read a while back about a research project to implement adblocking with computer vision. Wonder if that might be able to do it...
- hartator 8y ago
  I don't know. Google is still way ahead. > Google’s U.S. ad revenue is expected to rise $5 billion this year to $39.9 billion, while Facebook could rise $3 billion this year to $21 billion, according to eMarketer. Adwords is just so effective to find your customers. You won't beat `buy new headphones` type traffic on Amazon or Facebook.
  - scarface74 8y ago
    If I’m looking for headphones, wouldn’t it be more logical to start on Amazon? It’s not like Amazon is a site that people haven’t heard of. It’s the 4th most trafficked site in the US.
    - lozaning 8y ago
      Personally, Amazon is where I go to check prices after I've decided what it is I'm buying. I've never gone to Amazon without knowing exactly what I wanted.
      - scarface74 8y ago
        Your experience doesn’t jibe with market realities. Merchants play all sort of games to be the number one listed search result when you are searching for something generic like “headphones”.
        briandear 8y ago
        Who actually searches for such a short tail term and expects good results? Does anyone ever google the term “cars” when they want to buy a car? More likely it’s a term like “8 seat SUV” or something more focused. Maybe headphones are different though..
        scarface74 8y ago
        And the first non advertising link is car.com where I can search for specific cars. Now Google has lost a customer and car.com has gained one. Now I can advertise on car.com and get a much better targeted advertising.
- slimsag 8y ago
  > Google offers the least precise targeting compared to Facebook and Amazon. In my experience, Amazon has _incredibly poor_ targeting. Search and place an order for cat food, and the next day you'll get an email with: > Based on your recent activity, we thought you might be interested in this. > > ... cat food, the exact same brand I bought already ... Not only that, their targeting doesn't seem to be based on my past purchases nor my frequent purchases, but almost solely based on what I have searched for recently. They don't seem to use the _massive_ amount of data they have on my purchase history _at all_.
  - Macha 8y ago
    Hey, at least cat food is something consumable and that your cat'll use up and you'll need to order more of. Unlike say, consumer grade CPUs or specific video games.
    - freehunter 8y ago
      I bought a TV on Amazon a while back, they knew I looked it up and they knew I paid money for it and they knew I received it and I even left a review so they knew I used it. I got ads to buy that same TV that they knew I already bought for months after I bought it.
      - varjag 8y ago
        Relevant https://twitter.com/AliceAvizandum/status/1015988289642299392 https://twitter.com/AliceAvizandum/status/101598828964229939...
      - albertgoeswoof 8y ago
        The most predictable purchase for someone who has purchased one TV and reviewed it positively is the exact same TV for another room. They are just following the money, it might not make sense to an individual, but product recommendations are optimised for sales based on historical data.
        8y ago
- Ataraxy 8y ago
  Google is better able to capture 'intent' IMHO. It also makes it possible to find users who are at different specific stages of the buying process. That's way more powerful than what FB or Amazon offer.
  - scarface74 8y ago
    If I want to target a demographic for top of the funnel advertising, I can target a lot better with a Facebook. If I want to target people who are buying now, why not go to the source - Amazon, Zillow, Priceline, EBay, etc.?
- paulie_a 8y ago
  Facebook has terrible targeting. They might collect lots of data but they truly suck at utilizing it. It is pathetic. Google is fairly mediocre. Literally nothing in the quality of online advertising has changed since 1999. Sidenote, adblockers work with Amazon and Facebook.
  - scarface74 8y ago
    Not if you are on Facebook or Amazon. Most Facebook use is mobile and the Facebook app is one of the most popular. Ad blocking works on Google’s website.
  - cm2012 8y ago
    Facebook has better interest based targeting than anyone else on the web. Google is the king of intent based targeting. Source: I've managed and tested $10 million+ of ad spend that needed provable ROI across a wide variety of platforms.
    - tomrod 8y ago
      I'm curious about your experience here. In my experience Digital folks come with a lot of smoke and mirrors that crumble under standard statistical analysis.
      - cm2012 8y ago
        I mean, you don't need too many stat techniques for basic tracking: 1) Set up Facebook pixel on your checkout thank you page + collect referral into into a database. 2) Spend $1,000 3) See how many purchases Facebook reports came from Facebook, check out how many sales you get recently have the Facebook referrer. 4) Repeat if sales revenue > $1,000. This is obviously the simplest use case possible, but there you are. It's pretty reliable.
        tomrod 8y ago
        This is missing some testing. In multichannel environments you have the potential for multiple touches, as well as baseline if your company is large enough. For example, a traditional product like cars: you have a baseline of folks who come in, and then you have (ideally addtional/higher rate of) folks that come through the digital channel, such as engaging an online salesperson. Do the digital channels generate a higher rate of purchase than the baseline channel? If so, is the lift statistically significant? These are what I mean. Revenue moving through a digital pipeline could be because people happened to fall into that bucket but were already going to purchase anyway. In other words, some of the $1000 went to non-incremental marketing. The goal is to make sure the incremental marketing exceeds the spend.
- jayalpha 8y ago
  > Besides, ad blockers don’t work with Facebook or Amazon > embedded ads. Of cause they do: https://socialfixer.com/ https://socialfixer.com/
- adrr 8y ago
  If we're talking about data I think Google wins. Email is the activity stream of all your online purchases. Google analytics has the users' clickstream data. Google messenger and google+ gets the relationships the user has. Youtube gets entertainment data. Search is what is relevant to the custom at the moment of time. If I was Amazon, i'd look at buying mint from intuit to get all the banking data from users.
  - pinewurst 8y ago
    For the 3 people on Google+?
    - jacquesm 8y ago
      Someone once told me that Google+ was built using a lock-free architecture, it took me years to get the joke.
  - pookeh 8y ago
    You can replace "Google messenger and google+" with Android.
    - scarface74 8y ago
      And with Android in Western countries, statistically you get much less affluent users.... I would think that a lot of communications on mobile would be going through third party chat apps.
  - redial 8y ago
    > Google messenger and google+ gets the relationships the user has. Nobody uses google+. > Search is what is relevant to the custom at the moment of time. Yes, but in 5 years? Amazon is playing the long game.
  - mrep 8y ago
    Google doesn't read your email for ads anymore so that is moot for them.
- DougN7 8y ago
  It could work well for B2C cases, but I suspect it will be only marginally better than Facebook for B2B. Still, that’s still a huge market.
- usaar333 8y ago
  > Facebook knows more about its users because users tell it about themselves I'd be surprised if Google doesn't know more about its users than Facebook. Google (theoretically) has access to its users' email, physical locations, browsing history, and more. And search ads remain dominant for one time, high value purchases (think insurance or a mortgage).
  - scarface74 8y ago
    And Facebook knows where I actually go based on check ins. My hobbies and interest, the movies I watched, etc. People tell Facebook what they are doing. Besides people don’t use email for personal communication as much as they use apps like Messenger and WhatsApp. For high value purchases like a mortgage, wouldn’t better targeting be by advertising on a site like Zillow?
    - DavidHm 8y ago
      Google knows all that things too, without you having to expressly tell them. Where have you been? You are constantly tracked if you have an android device. (not sure whether it also works for iOS with google maps on). No need to check in. Hobbies and interest - search history. The amount of granular information that Google could potentially have on an individual person is terrifying. The search history alone is effectively a peek into your stream of consciousness.
      - scarface74 8y ago
        How does Google know my birthday, exactly how old I am, the events I said I was interested in, everytime I change jobs, my relationship status, the college I went to, where my wife and I went to see a show the other night, whether I am single, married, or somewhere in between? This is the kind of data that people tell FB about explicitly. Google only knows that have a vague interest in running. FB could have a better idea of when I go running because I might have posted about it or used one of the social apps that automatically post to FB. Google can only “peek”, FB is having an active conversation. Google doesn’t have the level of data for iOS devices on locations. iOS users in western countries are far more statistically valuable to advertisers than Android users.
- enitihas 8y ago
  But what users tell facebook may be completely incorrect, and might be more a reflection of how they want others to see their profile, for example liking things which may make them seem cool. Google on the other hand, should know your deepest hidden desires.
  - cortesoft 8y ago
    Right, but consumer purchases are probably more likely to be based on how you want to portray yourself than what your real desires are. A good chunk of consumer purchasing, especially high margin goods, are bought for signaling and not based on deep desires.
- csomar 8y ago
  > This is my bear case for Google. Google offers the least precise targeting compared to Facebook and Amazon. No way in hell. Google knows exactly what you are "searching" for. Sure Facebook is good at "guessing" but Google doesn't even need to guess. You just tell him what you are looking for.
- mooreds 8y ago
  I don't know. Google has some pretty precise targeting of intent with search terms. But I agree that it doesn't have anywhere near the wealth of user data.
- menzoic 8y ago
  Google has a lot more data than Facebook and Amazon combined. The targeting is not just based on your current search query. It forms a model of your behavior using your entire search history and browsing history which contains significantly more personal details about you and isn't limited to what you're willing to share in the public eye of Facebook. They also track your browsing history through every site you visit and Android app you use that serves Google ads (possibly more ecommerce than Amazon globally). They also track your location and travel patterns with Google maps and Android. All of the videos that you watch on Youtube (2nd most visited website in the world, above Facebook) tell a lot about you too. At one point I think data from your emails in Gmail was used but they stopped doing that.
  - Scown 8y ago
    All true, but as a potential advertiser you don't really get to use all that targeting when placing ads. Although to be fair that's mostly based on my experience with AdWords. On Facebook I can advertise to people in a well-defined geographical area, who are interested in a scarily well-defined set of things. On Google it's more of a just-in-time approach; catching people who are searching for something in a certain place etc. My business doesn't lend itself to Amazon ads, but I can totally see how it'd generate an ROI far exceeding Google or Facebook for product businesses that sell on Amazon.
    - nopriorarrests 8y ago
      >as a potential advertiser you don't really get to use all that targeting when placing ads. you don't need to. since google is interested in providing you cheap relevant clicks, it will deliver them to you without exposing all the targetings. all the data available wil be utilized in choosing the right audience anyway.
      - hayksaakian 8y ago
        This type of "trust us, we know what we're doing" targeting is typically less cost effective for advertisers. The fact it works at all is a technical achievement to be sure, but as far as Google goes I can vouch for the OP.
- nameisu 8y ago
  why dont adblockers work?
- manigandham 8y ago
  Absolutely not the case. The Google machine includes: Google Analytics, Adwords/Adsense, Doubleclick network, Android and store, Chrome Browser, Chrome OS, Maps/Streetview, Gmail, G-Suite, Youtube, Google Play, Google Fiber, Google Fi, Public DNS, all the various websites with 1st party cookies, connections to Salesforce CRM, and the recently announced Mastercard purchase data. Facebook and Amazon are nowhere close this level of exposure from hardware devices to internet protocols to the biggest websites around, and anyone with experience in adtech will tell you the same thing. Also adblockers can trivially block any network request or DOM component on a page, including Facebook and Amazon ads.
  - scarface74 8y ago
    All of that data is still just based on Google trying to “infer” interests which is not as accurate as people telling them about themselves. For instance, Facebook knows your relationship status as soon as it changes because most people tell them. Facebook knows where people like to eat because people check in. They know which events you are going to that are advertised on FB because you tell them “that you are interested”. Do you know how many people check in every single time they work out? People don’t use Google Maps when they know where they are going, but they will check in. As far as adblockers blocking contents “in the DOM”, that doesn’t help if you’re using the FB app - one of the most popular apps in the store and most people aren’t going to install network based ad blockers. Only geeks use Google’s DNS. Most people use whatever DNS the DHCP settings on thier router tell them. If you are using cellular data can you even change your DNS?
    - 1000units 8y ago
      Most of us are much more than we say.
    - qaq 8y ago
      google has your location they don't need you to checkin
      - scarface74 8y ago
- nabla9 8y ago
  Google and Mastercard Cut a Secret Ad Deal to Track Retail Sales https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...
- gscott 8y ago
  Facebook is dialing back the targeting you can use, it can take days to get your ad approved and I had an account for an insurance agency not be able to use the FB lead form capability because FB said it would be used by third parties. Fb might not be aligned to use their own strengths.
- ChuckMcM 8y ago
  I think the advertisers agree with you. This change is reflected in advertisers reducing the amount they are willing to pay Google for a click.
- deleted 8y ago
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- deleted 8y ago
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- robryan 8y ago
  We tell google about the purchases on our site 3 times. For AdWords, GA and Trusted Store reviews. They the have plenty of data on what is likely to convert.
- crunchlibrarian 8y ago
  Google realized this a decade ago and knows that the search engine is becoming a relic of the past, that's why they tried to pivot to social networking/media so strongly. I suspect they are still working on this pivot in various non google plus ways. Outside of android becoming a massive media platform I don't think much has worked. (Don't call it a media company we don't control the news we're just a platform la la la I can't hear you controls the news)
- MarkMc 8y ago
  > If I’m searching for something with the intention on buying it, I am going to go to the specific site - like Priceline, hotels.com, Zillow, etc. And quite often that specific site will tell Google everything they know about you because it wants to advertise on the AdSense network. For example, if you go to Singapore Airlines website and search for a flight to Thailand but do not buy it, then open the New York App to read the daily news, you will likely see an ad for Singapore Airlines - perhaps even showing a special deal on flights to Thailand.
- MarkMc 8y ago
  > Google offers the least precise targeting compared to Facebook and Amazon If that's true why haven't Facebook or Amazon launched a competitive AdSense alternative?
  - scarface74 8y ago
    Amazon has affiliate links.
  - badwolf 8y ago
    Facebook has Audience Network, Amazon is starting to roll out their own ad network as well.
- elorant 8y ago
  Sure but if you have a SaaS product then Google seems like a better fit because you can target keywords instead of humans since you don't really know if there are any similar characteristics to your buyers.
  - scarface74 8y ago
    Nahh then you just pay some analysts to make sure you are in second quadrant of “Gartber’s magic square” an advertise in a trade rag....
- dbmikus 8y ago
  Google shows you ads based on what you type in so you are directly telling them what you're looking for at that moment. That's a pretty good position to be in as an advertiser. Some people will do what you do and go right to a specific search site, but others will start that process at Google. Amazon can do the same, but the user is probably already looking to buy, although with less breadth of category coverage. Amazon is also more of a closed ecosystem, which is less flexible for advertisers but probably better for conversion.
- jacksmith21006 8y ago
  Nobody has the data that Google has. I highly recommend this video. https://www.youtube.com/watch?v=TS2der4Ag_s https://www.youtube.com/watch?v=TS2der4Ag_s
- dkrich 8y ago
  I look at it the other way. People keep comparing Amazon and Facebook to YouTube, But I don't understand why. YouTube is a single channel and is very different from others because they serve video ads. Google (search) on the other hand, seems to be a much closer competitor to Amazon because lots of people search for products there and then use Google's product search to find the product they want from many different retailers. It's sort of Amazon vs. the field. Do you want to limit your search to Amazon and its platform or expand your search to every online retailer who doesn't sell on Amazon? I've found Google product search to be extremely useful in finding the right combination of trusted retailer and lowest price (including sales tax and shipping). Add to this a list of highly-ranked reviews or sites related to the product I'm searching for directly beneath the list of products, and I usually find Google a better shopping experience.
cm2012 8y ago
Amazon ad revenue alone ($2.2 billion) for Q2 was already around 15% of Facebook's total Q2 revenue ($13 billion). That is nuts, if they have any room to grow that further, since ads isn't even Amazon's specialty. For reference, Snapchat did $290 million in the same timeframe, Twitter $660 million.
- scoggs 8y ago
  If it wasn't obvious already: > For reference, Snapchat did $290 million in the same timeframe, Twitter $660 million. Just goes to show how much potential Amazon has in the Ad Market. Does anyone else think Amazon could overtake one or both of Amazon's biggest competitors in the market (Facebook or Google)?
  - josephjrobison 8y ago
    Amazon is most like Facebook in that the ads are only displayed on its own property rather than all across the whole internet on any site that displays 3rd party ads. That, combined with the fact that Amazon also has a ton of data on its users just like Facebook makes them very alike (not that Google doesn't as well). What separates Google from Amazon is that their paid ads can be displayed on any 3rd party site that they don't own, through DoubleClick. And of course the whole search engine monopoly makes that impenetrable for now. Of course, it's all up for grabs, Amazon could go out and buy an ad network like Mediavine and go head-to-head with DoubleClick.
    - whitepoplar 8y ago
      FB, Instagram, and WhatsApp may as well be the whole internet for too many people.
    - nattaylor 8y ago
      Amazon and Facebook already have integrations with third parties
    - noer 8y ago
      Facebook has a display network similar to DoubleClick, called Audience Network. In my experience it pays publishers a lot better than DoubleClick. For advertisers, they're able to target on more demographic categories (for now, the CA scandal has done a lot to reduce targeting options).
mooreds 8y ago
I heard at a talk a few months ago that if you are planning to build an app to sell to retailers, you should build it on any cloud except for AWS. This is because the large retailers are uncomfortable with giving any revenue to Amazon. I heard echos of this in the last paragraph of the post, but there's plenty of co-opetition going on as well.
- goatherders 8y ago
  Sort of. Some retailers have chosen to use other providers because they compete with Amazon. But anyone building a new app is a LONG way from that being a roadblock to success.
  - mooreds 8y ago
    If it is a B2B app, maybe not that far :). But I agree, if you get to a certain size, you can move no matter where you start. I think it'd be an interesting angle displaying customer empathy though.
- scarface74 8y ago
  On the other hand, Netflix is AWS’s largest customer.
- kyrra 8y ago
  There is a story from a year ago where Walmart was telling some of its vendors to not use AWS. https://www.wsj.com/articles/wal-mart-to-vendors-get-off-amazons-cloud-1498037402 https://www.wsj.com/articles/wal-mart-to-vendors-get-off-ama...
- mr_toad 8y ago
  > giving any revenue to Amazon Amazon would be dumb to use AWS to cross-subside their retail business. That just hamstrings AWS, and gives other cloud vendors an advantage.
  - Analemma_ 8y ago
    I don’t think AWS is literally cross-subsidizing the retail business, but it allows Amazon to keep running retail at essentially zero profit without bothering Wall Street. Even without direct subsidization, that’s a serious advantage that no one else can really hope to match.
RA_Fisher 8y ago
My friend in commercial real estate said something I thought was interesting: the cost per acquisition in a mall can often beat the online CPA. I had assumed malls would have much higher CPA. It'd seem low-priced point retailers like Bonobos lend creedance to her claim.
krn 8y ago
Seeing ads in Amazon search results has substantially reduced my perceived trust in Amazon brand, since as a buyer I no longer feel like Amazon is on my side. I feel like I am Amazon's product. That it's me, who is for sale.
- cloudwizard 8y ago
  Probably a bigger issue for Amazon is that a large part of the ad market is competitors or potential competitors. Walmart, Safeway, and Azure won't be advertising on Amazon. Does P&G want Amazon to control more of the retail market? Not if it has any brains. Amazon has it's own branded home speaker systems and will not sell Google's. If Amazon brought out a shampoo brand, would it sell head and shoulders?
  - scarface74 8y ago
    P&G is already at the mercy of Walmart, Publix, etc. Why would Amazon be any different? I bet P&G would love to get branded Dash buttons all over people’s houses.
  - j-c-hewitt 8y ago
    Why would other big retailers pay for ads on Amazon's website? Brands are the ones who pay and already do. P&G already places a ton of advertising on Amazon for its various products. Search 'Tide' and look at the headline ad spot. That's P&G paying for that placement.
  - ikeboy 8y ago
    Amazon makes plenty of their own stuff, under Amazon basics, like 70 other brands, plus whatever they got with Whole Foods. Aside from the Kindle shenanigans, they haven't blocked competing brands.
- benatkin 8y ago
  I've also been seeing Amazon reviews in AdChoices square-shaped banner ads. I'm not sure Amazon is facilitating this but it makes it seem like the reviews are there just to get people to buy things, and the reviews are going to keep getting more and more fake like Uber, AirBnb, and Yelp.
danso 8y ago
I've been long amazed at how bad Amazon's web ads are, as if the department was authorized to get rid of money as fast as possible. Besides the times -- because of one click through to a joke product like $10K ultrapremium audio cables -- that I would get followed by weeks with absurd ads, my favorite example is getting barraged by Battlestar Galactica season 3 ads right after I bought the damn thing. OTOH, perhaps Amazon's ad/recommendation system was too smart, trying to warn me from purchasing season 4. I understand that big data learning systems are harder to tweak than what we'd suspect from ground-level day-to-day experience. But it just seems like Amazon still has plenty of room to apply some conventional heuristics to get far more efficiency than they do now.
- throwawaylalala 8y ago
  Many of those ads are paid for by the seller. The seller frequently isnt Amazon.
- j-c-hewitt 8y ago
  Those ads are mostly on Amazon's automatic remarketing systems. They only recently opened up control over the bidding and targeting of those to sellers and brands. Eventually considering how well that ad system tends to work in the right hands, I would expect it to be less intrusive and more effective over time. Amazon's remarketing tends to be paid for by Amazon and it behaves like any remarketing system run by other companies if you don't change anything from the defaults, set a very high frequency cap, and don't pay attention to whether or not the person converts.
greglindahl 8y ago
It's worth noting that Amazon showing ads on amazon.com is more like a "slotting fee" or "slotting allowance" than a display ad. Given that you're at amazon.com because you want to buy something, it's no surprise that online slotting fees can be lucrative. But it doesn't mean Amazon has much room to grow that beyond their overall growth.
- angstrom 8y ago
  It probably depends on the value funnel. As you get closer in rellavance to the target the ability to influence ought to be most valuable. I question if they are monetizing the ad value funnel fully.
levischoen 8y ago
If they have your information, every public company today will try and sell it. No exceptions. :-/
- sib 8y ago
  They will try to sell access to you based on the information that they have about you, but they will generally not sell the information they have about you. (For one thing, they could only do that once...)
aiyodev 8y ago
So Amazon is going to help other companies advertise products to customers that they have already bought?
snissn 8y ago
I've been getting strange ads on facebook for industrial kitchen items on amazon recently... i didn't think i wanted one, but now i am considering an at home industrial orange juice presser...
singularity2001 8y ago
This is horrible news. Now they are incentized to become as bad an actor as Google?
ddtaylor 8y ago
How long until one of these big tech companies sees a Microsoft style anti-trust problem like in the 90s?
- oblio 8y ago
  At least until 2021.
throwawayperson 8y ago
Ultimately, it's not a good thing.
tjpnz 8y ago
Slightly different topic but what are the big ad networks doing these days to address the proliferation of malware across their networks? I've been having a lot of issues with browser hijacking lately from ads that appear to be served from legitimate ad networks (after some cursory investigation namely from Doubleclick), and typically from HN submissions. I've attempted to report these issues on a number of occasions. But the amount of attention it gets suggests at worse a level of complicity.
- manigandham 8y ago
  It's a business problem, not technical. Lack of any regulation or consequences means no real economic incentive to stop malware in the industry. Also most of the malware is not directly on the big networks but specialized and spammy networks that sites run because they pay more.
- wdr1 8y ago
  Which big ads networks? Can you give examples?
rapnie 8y ago
If I run some large customer-facing services on AWS (or any service, for that matter), doesn't that provide Amazon with the same (or even better) detailed insights on customer behavior I can have? Am I the product as well as the customer on AWS? While Google with their cloud services has the same opportunity, this additional source of data is not available to FB.
- justfor1comment 8y ago
  Services you run on AWS are isolated from Amazon. It is part of their legal agreement. This is important so that businesses can store sensitive data on AWS without worrying about Amazon using this data for their own use cases.
rahulkapil 8y ago
It is hard to beat Google at its own turf.
telltruth 8y ago
Amazon is already an ad agency for vast number of 3rd seller while also offering fullfilment services. You can see the impact of transitioning to this business model. Large number of those “sponcered” listing is crape. A sizable 3rd party sellers are straight from China looking to dup the customers. Significant number of products that I bought past few months are branded like Duracell but completely fake.
phobosdeimos 8y ago
The tech industry is being propped up by ad money, no wonder we get all these privacy scandals.
millstone 8y ago
Amazon leadership principle numero uno: "Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust." Today: > The push by the giant online retailer means consumers — even Prime customers, who pay $119 a year for access to free shipping as well as streaming music, video and discounts — are likely to be confronted by ads in places where they didn’t exist before. Was this really the outcome from "start with the customer and work backwards?" > ...it [Amazon] is rapidly emerging as a major competitor to Google and Facebook. Gotcha. We all know who "the customer" is in this market. Seriously, completely wrong direction Amazon. Our trust is already eroding due to fake reviews, counterfeit items, and Amazon Marketplace nonsense. Racheting up ads will make us further question where your loyalties lie.
- krapp 8y ago
  >Our trust is already eroding due to fake reviews, counterfeit items, and Amazon Marketplace nonsense. Racheting up ads will make us further question where your loyalties lie. It doesn't matter until it matters in aggregate and affects share price. Whenever Amazon refers to "the customer" remember what they really mean is "the customer's money," which they're still getting plenty of.
novaRom 8y ago
Amazon knows way more about its users than Google and Facebook. It is easy to deduce a lot of information from my purchase history, my reviews, my 'helpful' clicks, my address, etc. I can switch to DDG, Telegram, and Yahoo Mail, but I certainly will continue do shopping on Amazon - there is no easy escape from it and I wonder why?
- Ahl4Gom6 8y ago
  If bits benefit from centralization the atoms do even more so.
dkrich 8y ago
> Thanks to the vast amount of data Amazon collects from its customers, it can target ads not only to basic demographics — say, women over the age of 35 — but to a more precise segment of customers who are likely to be shopping for cellphones or barbecue grills. ...and later: > “We can reach the right consumer at the right time using their wealth of data to target,” Ms. McGurk said. “Other traditional digital platforms do not have the level of purchase data that Amazon has on their customers.” It seems rather disingenuous to paint Google and Facebook as the bad guys for selling out their users' data for ad revenue but then go on to say that they are behind Amazon because Amazon has so much more useful customer data and is willing to sell it. It's becoming clear that the NYT is going to war with Facebook and Google (understandably so, since they killed their business). One final point- in a time of economic expansion, which we have been in for a few years now, ad spending is going to rise. All players- Facebook, Google, Amazon, probably even the New York Times- will see better results. There are more dollars floating around the economy as consumers spend more instead of save and advertisers feel that they need to spend more across all channels just to keep up with their competitors.
hnbroseph 8y ago
is there anything amazon isn't going to "set it's sights on"? will they be building and selling Amazon Houses and providing Amazon Health Insurance soon?
- justfor1comment 8y ago
  Amazon health insurance is already happening: https://www.cnbc.com/2018/01/30/amazon-berkshire-hathaway-and-jpmorgan-chase-to-partner-on-us-employee-health-care.html https://www.cnbc.com/2018/01/30/amazon-berkshire-hathaway-an...

280 points by extarial 8y ago

This is my bear case for Google. Google offers the least precise targeting compared to Facebook and Amazon. Facebook knows more about its users because users tell it about themselves and Amazon knows more about purchasing habits of its users because of thier purchase and search history. If I’m searching for something with the intention on buying it, I am going to go to the specific site - like Priceline, hotels.com, Zillow, etc. Besides, ad blockers don’t work with Facebook or Amazon embedded ads.

nailer 8y ago
> Besides, ad blockers don’t work with Facebook or Amazon embedded ads. Could you explain further? Do you mean A/FB ads on A/FB, or A/FB ads on third party sites? As long as they're marked as ads they're removable.
- earenndil 8y ago
  > (I think Ad Blockers are off topic, they're still very niche for now) Didn't google have to provide a big refund to advertisers just due to adnauseum use?
  - decide 8y ago
    Ad blockers are used by 600m devices. 40% desktop 15%. Mobile (at least in the US) Happy to gather sources if you'd like, I searched this up a few days ago
    - nailer 8y ago
      What % of page views? I'd be surprised if it was more than 1%.
- scarface74 8y ago
  Yes I am referring to ads on Facebook/Amazon.
earenndil 8y ago
> Besides, ad blockers don’t work with Facebook or Amazon embedded ads Don't they? They seem to work pretty well for google embedded ads.
- scarface74 8y ago
  Exactly what I am saying. It’s much easier to block Google ads than Facebook or Amazon ads. Facebook ads are seen on thier site and in their apps as is Amazon’s. Google is not a “destination site” aside from YouTube.
  - earenndil 8y ago
    When I perform a google search for something with no adblocker on, 'sponsored results' show up -- google ads, on google's website. Adblockers hide these. How is this different from fb or amazon aads?
    - scarface74 8y ago
      The majority of users are using FB on mobile and the FB app is one of the most popular. Ad Blockers that most people are using on mobile - either via the built in content blocking framework on iOS or by using another browser on Android, don’t work on FB. FB uses “native ads” and “boosted content” that are indistinguishable from regular posts.
      - bscphil 8y ago
        Even on desktop FB's ads are unblocked (or were when I used to have a FB account). They use a significant amount of obfuscation to make it impossible to use typical adblock techniques (url filter, css selectors, simple heuristics) without breaking the rest of the site. So far as I can tell most of the filter maintainers leave Facebook's native ads alone.
        earenndil 8y ago
        I read a while back about a research project to implement adblocking with computer vision. Wonder if that might be able to do it...
hartator 8y ago
I don't know. Google is still way ahead. > Google’s U.S. ad revenue is expected to rise $5 billion this year to $39.9 billion, while Facebook could rise $3 billion this year to $21 billion, according to eMarketer. Adwords is just so effective to find your customers. You won't beat `buy new headphones` type traffic on Amazon or Facebook.
- scarface74 8y ago
  If I’m looking for headphones, wouldn’t it be more logical to start on Amazon? It’s not like Amazon is a site that people haven’t heard of. It’s the 4th most trafficked site in the US.
  - lozaning 8y ago
    Personally, Amazon is where I go to check prices after I've decided what it is I'm buying. I've never gone to Amazon without knowing exactly what I wanted.
    - scarface74 8y ago
      Your experience doesn’t jibe with market realities. Merchants play all sort of games to be the number one listed search result when you are searching for something generic like “headphones”.
      - briandear 8y ago
        Who actually searches for such a short tail term and expects good results? Does anyone ever google the term “cars” when they want to buy a car? More likely it’s a term like “8 seat SUV” or something more focused. Maybe headphones are different though..
        scarface74 8y ago
        And the first non advertising link is car.com where I can search for specific cars. Now Google has lost a customer and car.com has gained one. Now I can advertise on car.com and get a much better targeted advertising.
slimsag 8y ago
> Google offers the least precise targeting compared to Facebook and Amazon. In my experience, Amazon has _incredibly poor_ targeting. Search and place an order for cat food, and the next day you'll get an email with: > Based on your recent activity, we thought you might be interested in this. > > ... cat food, the exact same brand I bought already ... Not only that, their targeting doesn't seem to be based on my past purchases nor my frequent purchases, but almost solely based on what I have searched for recently. They don't seem to use the _massive_ amount of data they have on my purchase history _at all_.
- Macha 8y ago
  Hey, at least cat food is something consumable and that your cat'll use up and you'll need to order more of. Unlike say, consumer grade CPUs or specific video games.
  - freehunter 8y ago
    I bought a TV on Amazon a while back, they knew I looked it up and they knew I paid money for it and they knew I received it and I even left a review so they knew I used it. I got ads to buy that same TV that they knew I already bought for months after I bought it.
    - varjag 8y ago
      Relevant https://twitter.com/AliceAvizandum/status/1015988289642299392 https://twitter.com/AliceAvizandum/status/101598828964229939...
    - albertgoeswoof 8y ago
      The most predictable purchase for someone who has purchased one TV and reviewed it positively is the exact same TV for another room. They are just following the money, it might not make sense to an individual, but product recommendations are optimised for sales based on historical data.
      - 8y ago
Ataraxy 8y ago
Google is better able to capture 'intent' IMHO. It also makes it possible to find users who are at different specific stages of the buying process. That's way more powerful than what FB or Amazon offer.
- scarface74 8y ago
  If I want to target a demographic for top of the funnel advertising, I can target a lot better with a Facebook. If I want to target people who are buying now, why not go to the source - Amazon, Zillow, Priceline, EBay, etc.?
paulie_a 8y ago
Facebook has terrible targeting. They might collect lots of data but they truly suck at utilizing it. It is pathetic. Google is fairly mediocre. Literally nothing in the quality of online advertising has changed since 1999. Sidenote, adblockers work with Amazon and Facebook.
- scarface74 8y ago
  Not if you are on Facebook or Amazon. Most Facebook use is mobile and the Facebook app is one of the most popular. Ad blocking works on Google’s website.
- cm2012 8y ago
  Facebook has better interest based targeting than anyone else on the web. Google is the king of intent based targeting. Source: I've managed and tested $10 million+ of ad spend that needed provable ROI across a wide variety of platforms.
  - tomrod 8y ago
    I'm curious about your experience here. In my experience Digital folks come with a lot of smoke and mirrors that crumble under standard statistical analysis.
    - cm2012 8y ago
      I mean, you don't need too many stat techniques for basic tracking: 1) Set up Facebook pixel on your checkout thank you page + collect referral into into a database. 2) Spend $1,000 3) See how many purchases Facebook reports came from Facebook, check out how many sales you get recently have the Facebook referrer. 4) Repeat if sales revenue > $1,000. This is obviously the simplest use case possible, but there you are. It's pretty reliable.
      - tomrod 8y ago
        This is missing some testing. In multichannel environments you have the potential for multiple touches, as well as baseline if your company is large enough. For example, a traditional product like cars: you have a baseline of folks who come in, and then you have (ideally addtional/higher rate of) folks that come through the digital channel, such as engaging an online salesperson. Do the digital channels generate a higher rate of purchase than the baseline channel? If so, is the lift statistically significant? These are what I mean. Revenue moving through a digital pipeline could be because people happened to fall into that bucket but were already going to purchase anyway. In other words, some of the $1000 went to non-incremental marketing. The goal is to make sure the incremental marketing exceeds the spend.
jayalpha 8y ago
> Besides, ad blockers don’t work with Facebook or Amazon > embedded ads. Of cause they do: https://socialfixer.com/ https://socialfixer.com/
adrr 8y ago
If we're talking about data I think Google wins. Email is the activity stream of all your online purchases. Google analytics has the users' clickstream data. Google messenger and google+ gets the relationships the user has. Youtube gets entertainment data. Search is what is relevant to the custom at the moment of time. If I was Amazon, i'd look at buying mint from intuit to get all the banking data from users.
- pinewurst 8y ago
  For the 3 people on Google+?
  - jacquesm 8y ago
    Someone once told me that Google+ was built using a lock-free architecture, it took me years to get the joke.
- pookeh 8y ago
  You can replace "Google messenger and google+" with Android.
  - scarface74 8y ago
    And with Android in Western countries, statistically you get much less affluent users.... I would think that a lot of communications on mobile would be going through third party chat apps.
- redial 8y ago
  > Google messenger and google+ gets the relationships the user has. Nobody uses google+. > Search is what is relevant to the custom at the moment of time. Yes, but in 5 years? Amazon is playing the long game.
- mrep 8y ago
  Google doesn't read your email for ads anymore so that is moot for them.
DougN7 8y ago
It could work well for B2C cases, but I suspect it will be only marginally better than Facebook for B2B. Still, that’s still a huge market.
usaar333 8y ago
> Facebook knows more about its users because users tell it about themselves I'd be surprised if Google doesn't know more about its users than Facebook. Google (theoretically) has access to its users' email, physical locations, browsing history, and more. And search ads remain dominant for one time, high value purchases (think insurance or a mortgage).
- scarface74 8y ago
  And Facebook knows where I actually go based on check ins. My hobbies and interest, the movies I watched, etc. People tell Facebook what they are doing. Besides people don’t use email for personal communication as much as they use apps like Messenger and WhatsApp. For high value purchases like a mortgage, wouldn’t better targeting be by advertising on a site like Zillow?
  - DavidHm 8y ago
    Google knows all that things too, without you having to expressly tell them. Where have you been? You are constantly tracked if you have an android device. (not sure whether it also works for iOS with google maps on). No need to check in. Hobbies and interest - search history. The amount of granular information that Google could potentially have on an individual person is terrifying. The search history alone is effectively a peek into your stream of consciousness.
    - scarface74 8y ago
      How does Google know my birthday, exactly how old I am, the events I said I was interested in, everytime I change jobs, my relationship status, the college I went to, where my wife and I went to see a show the other night, whether I am single, married, or somewhere in between? This is the kind of data that people tell FB about explicitly. Google only knows that have a vague interest in running. FB could have a better idea of when I go running because I might have posted about it or used one of the social apps that automatically post to FB. Google can only “peek”, FB is having an active conversation. Google doesn’t have the level of data for iOS devices on locations. iOS users in western countries are far more statistically valuable to advertisers than Android users.
enitihas 8y ago
But what users tell facebook may be completely incorrect, and might be more a reflection of how they want others to see their profile, for example liking things which may make them seem cool. Google on the other hand, should know your deepest hidden desires.
- cortesoft 8y ago
  Right, but consumer purchases are probably more likely to be based on how you want to portray yourself than what your real desires are. A good chunk of consumer purchasing, especially high margin goods, are bought for signaling and not based on deep desires.
csomar 8y ago
> This is my bear case for Google. Google offers the least precise targeting compared to Facebook and Amazon. No way in hell. Google knows exactly what you are "searching" for. Sure Facebook is good at "guessing" but Google doesn't even need to guess. You just tell him what you are looking for.
mooreds 8y ago
I don't know. Google has some pretty precise targeting of intent with search terms. But I agree that it doesn't have anywhere near the wealth of user data.
menzoic 8y ago
Google has a lot more data than Facebook and Amazon combined. The targeting is not just based on your current search query. It forms a model of your behavior using your entire search history and browsing history which contains significantly more personal details about you and isn't limited to what you're willing to share in the public eye of Facebook. They also track your browsing history through every site you visit and Android app you use that serves Google ads (possibly more ecommerce than Amazon globally). They also track your location and travel patterns with Google maps and Android. All of the videos that you watch on Youtube (2nd most visited website in the world, above Facebook) tell a lot about you too. At one point I think data from your emails in Gmail was used but they stopped doing that.
- Scown 8y ago
  All true, but as a potential advertiser you don't really get to use all that targeting when placing ads. Although to be fair that's mostly based on my experience with AdWords. On Facebook I can advertise to people in a well-defined geographical area, who are interested in a scarily well-defined set of things. On Google it's more of a just-in-time approach; catching people who are searching for something in a certain place etc. My business doesn't lend itself to Amazon ads, but I can totally see how it'd generate an ROI far exceeding Google or Facebook for product businesses that sell on Amazon.
  - nopriorarrests 8y ago
    >as a potential advertiser you don't really get to use all that targeting when placing ads. you don't need to. since google is interested in providing you cheap relevant clicks, it will deliver them to you without exposing all the targetings. all the data available wil be utilized in choosing the right audience anyway.
    - hayksaakian 8y ago
      This type of "trust us, we know what we're doing" targeting is typically less cost effective for advertisers. The fact it works at all is a technical achievement to be sure, but as far as Google goes I can vouch for the OP.
nameisu 8y ago
why dont adblockers work?
manigandham 8y ago
Absolutely not the case. The Google machine includes: Google Analytics, Adwords/Adsense, Doubleclick network, Android and store, Chrome Browser, Chrome OS, Maps/Streetview, Gmail, G-Suite, Youtube, Google Play, Google Fiber, Google Fi, Public DNS, all the various websites with 1st party cookies, connections to Salesforce CRM, and the recently announced Mastercard purchase data. Facebook and Amazon are nowhere close this level of exposure from hardware devices to internet protocols to the biggest websites around, and anyone with experience in adtech will tell you the same thing. Also adblockers can trivially block any network request or DOM component on a page, including Facebook and Amazon ads.
- scarface74 8y ago
  All of that data is still just based on Google trying to “infer” interests which is not as accurate as people telling them about themselves. For instance, Facebook knows your relationship status as soon as it changes because most people tell them. Facebook knows where people like to eat because people check in. They know which events you are going to that are advertised on FB because you tell them “that you are interested”. Do you know how many people check in every single time they work out? People don’t use Google Maps when they know where they are going, but they will check in. As far as adblockers blocking contents “in the DOM”, that doesn’t help if you’re using the FB app - one of the most popular apps in the store and most people aren’t going to install network based ad blockers. Only geeks use Google’s DNS. Most people use whatever DNS the DHCP settings on thier router tell them. If you are using cellular data can you even change your DNS?
  - 1000units 8y ago
    Most of us are much more than we say.
  - qaq 8y ago
    google has your location they don't need you to checkin
    - scarface74 8y ago
nabla9 8y ago
Google and Mastercard Cut a Secret Ad Deal to Track Retail Sales https://www.bloomberg.com/news/articles/2018-08-30/google-and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales https://www.bloomberg.com/news/articles/2018-08-30/google-an...
gscott 8y ago
Facebook is dialing back the targeting you can use, it can take days to get your ad approved and I had an account for an insurance agency not be able to use the FB lead form capability because FB said it would be used by third parties. Fb might not be aligned to use their own strengths.
ChuckMcM 8y ago
I think the advertisers agree with you. This change is reflected in advertisers reducing the amount they are willing to pay Google for a click.
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robryan 8y ago
We tell google about the purchases on our site 3 times. For AdWords, GA and Trusted Store reviews. They the have plenty of data on what is likely to convert.
crunchlibrarian 8y ago
Google realized this a decade ago and knows that the search engine is becoming a relic of the past, that's why they tried to pivot to social networking/media so strongly. I suspect they are still working on this pivot in various non google plus ways. Outside of android becoming a massive media platform I don't think much has worked. (Don't call it a media company we don't control the news we're just a platform la la la I can't hear you controls the news)
MarkMc 8y ago
> If I’m searching for something with the intention on buying it, I am going to go to the specific site - like Priceline, hotels.com, Zillow, etc. And quite often that specific site will tell Google everything they know about you because it wants to advertise on the AdSense network. For example, if you go to Singapore Airlines website and search for a flight to Thailand but do not buy it, then open the New York App to read the daily news, you will likely see an ad for Singapore Airlines - perhaps even showing a special deal on flights to Thailand.
MarkMc 8y ago
> Google offers the least precise targeting compared to Facebook and Amazon If that's true why haven't Facebook or Amazon launched a competitive AdSense alternative?
- scarface74 8y ago
  Amazon has affiliate links.
- badwolf 8y ago
  Facebook has Audience Network, Amazon is starting to roll out their own ad network as well.
elorant 8y ago
Sure but if you have a SaaS product then Google seems like a better fit because you can target keywords instead of humans since you don't really know if there are any similar characteristics to your buyers.
- scarface74 8y ago
  Nahh then you just pay some analysts to make sure you are in second quadrant of “Gartber’s magic square” an advertise in a trade rag....
dbmikus 8y ago
Google shows you ads based on what you type in so you are directly telling them what you're looking for at that moment. That's a pretty good position to be in as an advertiser. Some people will do what you do and go right to a specific search site, but others will start that process at Google. Amazon can do the same, but the user is probably already looking to buy, although with less breadth of category coverage. Amazon is also more of a closed ecosystem, which is less flexible for advertisers but probably better for conversion.
jacksmith21006 8y ago
Nobody has the data that Google has. I highly recommend this video. https://www.youtube.com/watch?v=TS2der4Ag_s https://www.youtube.com/watch?v=TS2der4Ag_s
dkrich 8y ago
I look at it the other way. People keep comparing Amazon and Facebook to YouTube, But I don't understand why. YouTube is a single channel and is very different from others because they serve video ads. Google (search) on the other hand, seems to be a much closer competitor to Amazon because lots of people search for products there and then use Google's product search to find the product they want from many different retailers. It's sort of Amazon vs. the field. Do you want to limit your search to Amazon and its platform or expand your search to every online retailer who doesn't sell on Amazon? I've found Google product search to be extremely useful in finding the right combination of trusted retailer and lowest price (including sales tax and shipping). Add to this a list of highly-ranked reviews or sites related to the product I'm searching for directly beneath the list of products, and I usually find Google a better shopping experience.

cm2012 8y ago

Amazon ad revenue alone ($2.2 billion) for Q2 was already around 15% of Facebook's total Q2 revenue ($13 billion). That is nuts, if they have any room to grow that further, since ads isn't even Amazon's specialty. For reference, Snapchat did $290 million in the same timeframe, Twitter $660 million.

scoggs 8y ago
If it wasn't obvious already: > For reference, Snapchat did $290 million in the same timeframe, Twitter $660 million. Just goes to show how much potential Amazon has in the Ad Market. Does anyone else think Amazon could overtake one or both of Amazon's biggest competitors in the market (Facebook or Google)?
- josephjrobison 8y ago
  Amazon is most like Facebook in that the ads are only displayed on its own property rather than all across the whole internet on any site that displays 3rd party ads. That, combined with the fact that Amazon also has a ton of data on its users just like Facebook makes them very alike (not that Google doesn't as well). What separates Google from Amazon is that their paid ads can be displayed on any 3rd party site that they don't own, through DoubleClick. And of course the whole search engine monopoly makes that impenetrable for now. Of course, it's all up for grabs, Amazon could go out and buy an ad network like Mediavine and go head-to-head with DoubleClick.
  - whitepoplar 8y ago
    FB, Instagram, and WhatsApp may as well be the whole internet for too many people.
  - nattaylor 8y ago
    Amazon and Facebook already have integrations with third parties
  - noer 8y ago
    Facebook has a display network similar to DoubleClick, called Audience Network. In my experience it pays publishers a lot better than DoubleClick. For advertisers, they're able to target on more demographic categories (for now, the CA scandal has done a lot to reduce targeting options).

mooreds 8y ago

I heard at a talk a few months ago that if you are planning to build an app to sell to retailers, you should build it on any cloud except for AWS. This is because the large retailers are uncomfortable with giving any revenue to Amazon. I heard echos of this in the last paragraph of the post, but there's plenty of co-opetition going on as well.

goatherders 8y ago
Sort of. Some retailers have chosen to use other providers because they compete with Amazon. But anyone building a new app is a LONG way from that being a roadblock to success.
- mooreds 8y ago
  If it is a B2B app, maybe not that far :). But I agree, if you get to a certain size, you can move no matter where you start. I think it'd be an interesting angle displaying customer empathy though.
scarface74 8y ago
On the other hand, Netflix is AWS’s largest customer.
kyrra 8y ago
There is a story from a year ago where Walmart was telling some of its vendors to not use AWS. https://www.wsj.com/articles/wal-mart-to-vendors-get-off-amazons-cloud-1498037402 https://www.wsj.com/articles/wal-mart-to-vendors-get-off-ama...
mr_toad 8y ago
> giving any revenue to Amazon Amazon would be dumb to use AWS to cross-subside their retail business. That just hamstrings AWS, and gives other cloud vendors an advantage.
- Analemma_ 8y ago
  I don’t think AWS is literally cross-subsidizing the retail business, but it allows Amazon to keep running retail at essentially zero profit without bothering Wall Street. Even without direct subsidization, that’s a serious advantage that no one else can really hope to match.

RA_Fisher 8y ago

My friend in commercial real estate said something I thought was interesting: the cost per acquisition in a mall can often beat the online CPA. I had assumed malls would have much higher CPA. It'd seem low-priced point retailers like Bonobos lend creedance to her claim.

krn 8y ago

Seeing ads in Amazon search results has substantially reduced my perceived trust in Amazon brand, since as a buyer I no longer feel like Amazon is on my side. I feel like I am Amazon's product. That it's me, who is for sale.

cloudwizard 8y ago
Probably a bigger issue for Amazon is that a large part of the ad market is competitors or potential competitors. Walmart, Safeway, and Azure won't be advertising on Amazon. Does P&G want Amazon to control more of the retail market? Not if it has any brains. Amazon has it's own branded home speaker systems and will not sell Google's. If Amazon brought out a shampoo brand, would it sell head and shoulders?
- scarface74 8y ago
  P&G is already at the mercy of Walmart, Publix, etc. Why would Amazon be any different? I bet P&G would love to get branded Dash buttons all over people’s houses.
- j-c-hewitt 8y ago
  Why would other big retailers pay for ads on Amazon's website? Brands are the ones who pay and already do. P&G already places a ton of advertising on Amazon for its various products. Search 'Tide' and look at the headline ad spot. That's P&G paying for that placement.
- ikeboy 8y ago
  Amazon makes plenty of their own stuff, under Amazon basics, like 70 other brands, plus whatever they got with Whole Foods. Aside from the Kindle shenanigans, they haven't blocked competing brands.
benatkin 8y ago
I've also been seeing Amazon reviews in AdChoices square-shaped banner ads. I'm not sure Amazon is facilitating this but it makes it seem like the reviews are there just to get people to buy things, and the reviews are going to keep getting more and more fake like Uber, AirBnb, and Yelp.

danso 8y ago

I've been long amazed at how bad Amazon's web ads are, as if the department was authorized to get rid of money as fast as possible. Besides the times -- because of one click through to a joke product like $10K ultrapremium audio cables -- that I would get followed by weeks with absurd ads, my favorite example is getting barraged by Battlestar Galactica season 3 ads right after I bought the damn thing. OTOH, perhaps Amazon's ad/recommendation system was too smart, trying to warn me from purchasing season 4. I understand that big data learning systems are harder to tweak than what we'd suspect from ground-level day-to-day experience. But it just seems like Amazon still has plenty of room to apply some conventional heuristics to get far more efficiency than they do now.

throwawaylalala 8y ago
Many of those ads are paid for by the seller. The seller frequently isnt Amazon.
j-c-hewitt 8y ago
Those ads are mostly on Amazon's automatic remarketing systems. They only recently opened up control over the bidding and targeting of those to sellers and brands. Eventually considering how well that ad system tends to work in the right hands, I would expect it to be less intrusive and more effective over time. Amazon's remarketing tends to be paid for by Amazon and it behaves like any remarketing system run by other companies if you don't change anything from the defaults, set a very high frequency cap, and don't pay attention to whether or not the person converts.

greglindahl 8y ago

It's worth noting that Amazon showing ads on amazon.com is more like a "slotting fee" or "slotting allowance" than a display ad. Given that you're at amazon.com because you want to buy something, it's no surprise that online slotting fees can be lucrative. But it doesn't mean Amazon has much room to grow that beyond their overall growth.

angstrom 8y ago
It probably depends on the value funnel. As you get closer in rellavance to the target the ability to influence ought to be most valuable. I question if they are monetizing the ad value funnel fully.

levischoen 8y ago

If they have your information, every public company today will try and sell it. No exceptions. :-/

sib 8y ago
They will try to sell access to you based on the information that they have about you, but they will generally not sell the information they have about you. (For one thing, they could only do that once...)

aiyodev 8y ago

So Amazon is going to help other companies advertise products to customers that they have already bought?

snissn 8y ago

I've been getting strange ads on facebook for industrial kitchen items on amazon recently... i didn't think i wanted one, but now i am considering an at home industrial orange juice presser...

singularity2001 8y ago

This is horrible news. Now they are incentized to become as bad an actor as Google?

ddtaylor 8y ago

How long until one of these big tech companies sees a Microsoft style anti-trust problem like in the 90s?

oblio 8y ago
At least until 2021.

throwawayperson 8y ago

Ultimately, it's not a good thing.

tjpnz 8y ago

Slightly different topic but what are the big ad networks doing these days to address the proliferation of malware across their networks? I've been having a lot of issues with browser hijacking lately from ads that appear to be served from legitimate ad networks (after some cursory investigation namely from Doubleclick), and typically from HN submissions. I've attempted to report these issues on a number of occasions. But the amount of attention it gets suggests at worse a level of complicity.

manigandham 8y ago
It's a business problem, not technical. Lack of any regulation or consequences means no real economic incentive to stop malware in the industry. Also most of the malware is not directly on the big networks but specialized and spammy networks that sites run because they pay more.
wdr1 8y ago
Which big ads networks? Can you give examples?

rapnie 8y ago

If I run some large customer-facing services on AWS (or any service, for that matter), doesn't that provide Amazon with the same (or even better) detailed insights on customer behavior I can have? Am I the product as well as the customer on AWS? While Google with their cloud services has the same opportunity, this additional source of data is not available to FB.

justfor1comment 8y ago
Services you run on AWS are isolated from Amazon. It is part of their legal agreement. This is important so that businesses can store sensitive data on AWS without worrying about Amazon using this data for their own use cases.

rahulkapil 8y ago

It is hard to beat Google at its own turf.

telltruth 8y ago

Amazon is already an ad agency for vast number of 3rd seller while also offering fullfilment services. You can see the impact of transitioning to this business model. Large number of those “sponcered” listing is crape. A sizable 3rd party sellers are straight from China looking to dup the customers. Significant number of products that I bought past few months are branded like Duracell but completely fake.

phobosdeimos 8y ago

The tech industry is being propped up by ad money, no wonder we get all these privacy scandals.

millstone 8y ago

Amazon leadership principle numero uno: "Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust." Today: > The push by the giant online retailer means consumers — even Prime customers, who pay $119 a year for access to free shipping as well as streaming music, video and discounts — are likely to be confronted by ads in places where they didn’t exist before. Was this really the outcome from "start with the customer and work backwards?" > ...it [Amazon] is rapidly emerging as a major competitor to Google and Facebook. Gotcha. We all know who "the customer" is in this market. Seriously, completely wrong direction Amazon. Our trust is already eroding due to fake reviews, counterfeit items, and Amazon Marketplace nonsense. Racheting up ads will make us further question where your loyalties lie.

krapp 8y ago
>Our trust is already eroding due to fake reviews, counterfeit items, and Amazon Marketplace nonsense. Racheting up ads will make us further question where your loyalties lie. It doesn't matter until it matters in aggregate and affects share price. Whenever Amazon refers to "the customer" remember what they really mean is "the customer's money," which they're still getting plenty of.

novaRom 8y ago

Amazon knows way more about its users than Google and Facebook. It is easy to deduce a lot of information from my purchase history, my reviews, my 'helpful' clicks, my address, etc. I can switch to DDG, Telegram, and Yahoo Mail, but I certainly will continue do shopping on Amazon - there is no easy escape from it and I wonder why?

Ahl4Gom6 8y ago
If bits benefit from centralization the atoms do even more so.

dkrich 8y ago

> Thanks to the vast amount of data Amazon collects from its customers, it can target ads not only to basic demographics — say, women over the age of 35 — but to a more precise segment of customers who are likely to be shopping for cellphones or barbecue grills. ...and later: > “We can reach the right consumer at the right time using their wealth of data to target,” Ms. McGurk said. “Other traditional digital platforms do not have the level of purchase data that Amazon has on their customers.” It seems rather disingenuous to paint Google and Facebook as the bad guys for selling out their users' data for ad revenue but then go on to say that they are behind Amazon because Amazon has so much more useful customer data and is willing to sell it. It's becoming clear that the NYT is going to war with Facebook and Google (understandably so, since they killed their business). One final point- in a time of economic expansion, which we have been in for a few years now, ad spending is going to rise. All players- Facebook, Google, Amazon, probably even the New York Times- will see better results. There are more dollars floating around the economy as consumers spend more instead of save and advertisers feel that they need to spend more across all channels just to keep up with their competitors.

hnbroseph 8y ago

is there anything amazon isn't going to "set it's sights on"? will they be building and selling Amazon Houses and providing Amazon Health Insurance soon?

justfor1comment 8y ago
Amazon health insurance is already happening: https://www.cnbc.com/2018/01/30/amazon-berkshire-hathaway-and-jpmorgan-chase-to-partner-on-us-employee-health-care.html https://www.cnbc.com/2018/01/30/amazon-berkshire-hathaway-an...