4 ms·

Aren't Amazon ads just sellers prioritizing their listing on the Amazon page? Seems totally different from the ad market for Google

xyzzyz 4y ago
Aren't Google ads just businesses prioritizing their listings on Google search page?
- adam_arthur 4y ago
  Who will advertise a concert or any various services on Amazon? Or a restaurant? A conference? Very niche focus for Amazon vs broader set of customers for Google ads. Seems totally different to me
  - kevinsundar 4y ago
    Ecommerce sellers have higher margins (gross margin 40%) than the other services and businesses you mentioned. So they have more money to spend on Ads. Also Google competes with FB and has to split the advertising pie for those other services and businesses. Amazon owns basically the whole pie for the people who want to advertise products.
    - adam_arthur 4y ago
      E-commerce has terrible margins Amazon itself had negative operating margins for its retail business last quarter. Amazon retail: "Its U.S. segment recorded $206 million in operating losses, while the international side lost $1.63 billion." Single digit margins at best, once a market is competitive. Edit: You edited your above, but gross margin is meaningless. It doesn't even include salaries for employees or infrastructure costs. Net margins for retail will always be slim, outside of specific first mover advantage in some subsectors. You think the Chinese companies selling $5 rubber spatulas are making 40% margins? Lol, try 5% or less. The theory that Amazon retail would grow revenues rapidly and then eventually expand to high operating margins will never come to fruition. Margins will be below 10% in perpetuity But sure, ignore all costs of running the business and look at gross margins.
      - kevinsundar 4y ago
        A quick search says 40% gross margins for e-commerce. So Income - COGS. Which is pretty damn high. Most of these sellers are selling cheap Chinese goods so I bet it's even higher on Amazon. And Amazon retail margins is way different and in no way comparable to SELLER margins.
      - londons_explore 4y ago
        Amazon loses money on every sale, yet somehow they are far pricier than ebay (which is profitable), and that is far pricier than aliexpress. A quick sample of like-for-like products shows that typical sale+delivery price on amazon is 30% more than aliexpress and 18% more than ebay. I really don't see how you can charge 30% more than a profit making competitor, sell in larger volume, yet make a loss.
        deleted 4y ago
        [deleted]
  - oezi 4y ago
    Give it 5 years (3?) and they might just sell many of these. Concert tickets, restaurant bookings/take out aren't so hard to imagine. I think Amazon's ambition is endless.
  - vineyardmike 4y ago
    Many of my Amazon ads are for non products like financial services (specifically Amex)
- stingrae 4y ago
  No. They are ads all over the internet through AdSense.
alecb 4y ago
Amazon has a pretty developed video and display advertising market for publishers called Unified Ad Marketplace; for our business, it's typically in second behind AdX/Adsense for revenue and impressions won. That said, I'm not seeing any revenue breakout from Amazon that specifies how much this side of the business makes.

xyzzyz 4y ago

Aren't Google ads just businesses prioritizing their listings on Google search page?

adam_arthur 4y ago
Who will advertise a concert or any various services on Amazon? Or a restaurant? A conference? Very niche focus for Amazon vs broader set of customers for Google ads. Seems totally different to me
- kevinsundar 4y ago
  Ecommerce sellers have higher margins (gross margin 40%) than the other services and businesses you mentioned. So they have more money to spend on Ads. Also Google competes with FB and has to split the advertising pie for those other services and businesses. Amazon owns basically the whole pie for the people who want to advertise products.
  - adam_arthur 4y ago
    E-commerce has terrible margins Amazon itself had negative operating margins for its retail business last quarter. Amazon retail: "Its U.S. segment recorded $206 million in operating losses, while the international side lost $1.63 billion." Single digit margins at best, once a market is competitive. Edit: You edited your above, but gross margin is meaningless. It doesn't even include salaries for employees or infrastructure costs. Net margins for retail will always be slim, outside of specific first mover advantage in some subsectors. You think the Chinese companies selling $5 rubber spatulas are making 40% margins? Lol, try 5% or less. The theory that Amazon retail would grow revenues rapidly and then eventually expand to high operating margins will never come to fruition. Margins will be below 10% in perpetuity But sure, ignore all costs of running the business and look at gross margins.
    - kevinsundar 4y ago
      A quick search says 40% gross margins for e-commerce. So Income - COGS. Which is pretty damn high. Most of these sellers are selling cheap Chinese goods so I bet it's even higher on Amazon. And Amazon retail margins is way different and in no way comparable to SELLER margins.
    - londons_explore 4y ago
      Amazon loses money on every sale, yet somehow they are far pricier than ebay (which is profitable), and that is far pricier than aliexpress. A quick sample of like-for-like products shows that typical sale+delivery price on amazon is 30% more than aliexpress and 18% more than ebay. I really don't see how you can charge 30% more than a profit making competitor, sell in larger volume, yet make a loss.
      - deleted 4y ago
        [deleted]
- oezi 4y ago
  Give it 5 years (3?) and they might just sell many of these. Concert tickets, restaurant bookings/take out aren't so hard to imagine. I think Amazon's ambition is endless.
- vineyardmike 4y ago
  Many of my Amazon ads are for non products like financial services (specifically Amex)
stingrae 4y ago
No. They are ads all over the internet through AdSense.

alecb 4y ago

Amazon has a pretty developed video and display advertising market for publishers called Unified Ad Marketplace; for our business, it's typically in second behind AdX/Adsense for revenue and impressions won. That said, I'm not seeing any revenue breakout from Amazon that specifies how much this side of the business makes.