Amazon. Will it be the largest DSP?

August 12, 2011 § Leave a comment

Amazon announced in late June that  it was entering the world of advertising by using its consumer data to deliver targeted advertising on third-party sites across the web

Amazon will now use its huge supply of data to pool consumers into buckets based on the products they looked at or purchased on the retailer’s website. The company will help advertisers reach these consumers with targeted media, using behaviorally targeted display ads to drive them to any URL.

Amazon has more than a decade’s worth of sales and consumer shopping data, so it’s almost a surprise it took the company this long to capitalize on its data and enter the behavioral-targeting space. It’s a great idea that will help marketers find interested consumers, and other retailers are already trying to copy the model. Every online retailer is a media network, even if they don’t know it yet, and there’s plenty of opportunity for retailers of all sizes to copy Amazon’s model.

In the most general terms, Amazon is using brand data to build an ad network that delivers relevant advertising. The company has great insight into consumer shopping activity and brand preferences. Brands advertisers can use this data to find potential customers, and possibly offer a discount to push a consumer toward purchase.

Merchants can function as both media properties and audience networks because they already posses a targeting criteria that actually matters: consumer behavior or brand-preference data that can power interest-based advertising across the web. Retailers know which brands consumers interact with on their sites, and that is indicative of consumer desire.

Amazon will compete with most behavioral-targeting networks right off the bat because of the scope of its data. Consumer ad networks or vertical-related networks are often selling contextual advertising, and Amazon has an immediate advantage because it is using proprietary data.

Amazon is going to profit heavily off of this win-win-win scenario. If you take this retailer/ad network model and combine manufacturer data, in a system where open data sharing is encouraged, you’re opening the door to unprecedented ad targeting, something all retailers could profit from

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