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Amazon Invests in Tools for Advertisers, a Growing Source of Revenue


Amazon logoAmazon announced new tools to help advertisers manage their daily budgets for Sponsored Product campaigns. The new notifications and tailored recommendations are designed to keep merchants’ ad campaigns live throughout the day.

Advertising is a growing source of revenue for Amazon. In an article in late January, the Wall Street Journal cited a report from JP Morgan that estimated $2.8 billion in ad revenue and 2017, which could double by 2019.

Amazon said its new real-time budget notifications now appear at the top of Campaign Manager in both Seller Central and Amazon Marketing Services (AMS) accounts, where advertisers create and manage their ad campaigns.

When sellers log into their accounts, they will know when Sponsored Products campaigns are out of daily budget or have spent at least 80% of the budget, as well as the total number of campaigns affected.

The Journal said Amazon’s ad business could threaten Google and Facebook, noting that it has valuable data its tech competitors can’t access: its own sales. It detailed the costs for a brand called Jijamas, which finds it must advertise on Amazon because its search algorithm “favors cheaper, higher-volume goods”:

“On top of the 15% of an item’s selling price that Mr. Sanchez pays just to list Jijamas on Amazon’s marketplace, and the 5% to 6% he pays to have Amazon warehouse and ship his products, there is now up to 12% going to advertising for every item sold through an ad. This April, Amazon will start charging an additional 2% to list apparel (it hasn’t disclosed why). The net result is that Amazon will take about 35% of the price of each pair of Jijamas sold through its sponsored listings.”

Meanwhile TechCrunch reports that Google is launching “auto ads” today, tapping into its big push to add more artificial intelligence into its business “and to potentially bring on more publishers who might consider ramping up their advertising efforts but don’t have the time or other resources to manage them.” (See the announcement here.)

You can find Amazon’s announcement on new Sponsored Products tools on its Advertising blog.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.