Happy Birthday, Amazon: why the marketplace is now a player in advertising (and just about everything else)

By MAD//Picnic Editors 09 Jul 2019

Jeff Bezos founded Amazon as an online bookseller on 5 July 1994. A quarter-of-a-century later, Bezos is the richest man in modern history and his company does more or less everything. Here are some of the key ways Amazon is shaping advertising, retail and society.

Amazon is now a massive advertising player

While it remains a long way behind Google, Amazon’s ad revenue doubled in 2018 to surpass $10bn (£7.97bn) for the first time. Growth did slow in the first quarter to a mere 34% year on year, but on the other hand, influential figures remain bullish about the growth prospects of the company: Sir Martin Sorrell predicted earlier this year that Amazon’s ad business would eventually grow to $100bn.

It is using its marketplace status to nab sales from brands

Amazon has caused some consternation with the way it promoted its (usually cheaper) own-brand products in search listings and on the product pages of branded competitors, many of which rely on Amazon’s platform to sell their products online. Earlier this year, it rowed back on some of its more aggressive practices, but Wavemaker’s global head of ecommerce, Mudit Jaju, warned that this did not mean brands should expect an easier ride in the future.

It’s both friend and foe

Amazon’s unique status in the ecosystem of ecommerce and consumer data means brands need to start thinking in terms of "co-opetition", Dentsu Aegis Network’s Jack Swayne and Flora Kessler said at Campaign’s Performance Marketing 360 conference in May. That meant looking at differentiating the kinds of products that were being sold on Amazon to those sold on an owned direct-to-consumer plattorm.

It’s making serious moves into bricks-and-mortar retail 

Reports emerged in December 2018 that Amazon has chosen a prime central London site close to Oxford Circus for its first cashier-less grocery store outside the US. The stores, the first of which opened in Seattle in 2017, allow shoppers to take what they want from the shelves and walk out of the shop, with technology used to charge their Amazon account for the items taken. It has also tried out physical retail formats including Amazon 4-star in New York, which only sells products rated four stars or higher on its platform.

It has big ambitions in streaming

Amazon Prime Video has been pushing hard to win a share of viewers’ attention in the increasingly competitive streaming market. It recruited Droga5 London for an entertaining campaign depicting the life-changing effects of bingeing a TV show.

Amazon has recently received plaudits for Good Omens, its adaptation of the Terry Pratchett and Neil Gaiman novel, but the fact that a group of evangelical Christians mistakenly petitioned Netflix to cancel the show demonstrates that this is one area in which Amazon still has some work to do on its brand recognition.

This article was originally published by Campaign - click here to read it. Amazon MD - Advertising Caleb Hill is speaking at MAD//Picnic this Wednesday 10 July.

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