Amazon online advertising Google challenge

Will Amazon online advertising be taking Google head on in the multibillion lucrative Internet ad market? It appears the giant online retailer is developing its own software for online ad placement that incorporates data on its hundreds of millions of online shoppers.

To start with, Amazon says it will place the ads on its own pages, according to an unnamed person familiar with the matter quoted by the Wall Street Journal.

It seems that Amazon’s ultimate aim is to challenge the $50 billion per year advertising business that Google dominates.

The Seattle-based company already has a fledgling business placing adverts on other websites. It is currently testing that program with several new types of ads.

Amazon understands shopper behavior

Amazon has access to data on the shopping behavior of millions of customers, something that could make their ads far more effective for marketers, who would jump at the chance of having another viable option available, apart from the current Facebook or Google offerings.

The new advertising service, currently called Amazon Sponsored Links, may start being tested in the second half of 2014. According to what Amazon told potential ad partners, the aim will be to bring marketers and its nearly one-quarter of a billion active users closer together.

Both companies have been treading on each other’s toes recently. Google, with its Google Shopping Express is grabbing an increasing number of customers in the online retail market. Amazon launched its Fire Phone and also offers online storage services.

Most experts agree that when it comes to knowing about consumer preferences and how people search for products online, Amazon’s potential ability to tailor advertising is unique.

What Amazon’s offering will be like remains to be seen, it could well become something very similar to Google’s AdWords.

Online advertising revenue is growing rapidly. According to EMarketer, Amazon’s online advertising sales will probably hit the $1 billion mark by the end of 2014, compared to about $700 million in 2013. But this is a drop in the Ocean compared to Google’s $50 billion.

Facebook, Google and Amazon

Marketers would love to see another big player compete in the online ad business.

A double-whammy for Google?

The blow to Google’s bottom line would come from two directions if Amazon successfully develops an effective online advertising package for marketers.

  • Firstly, it would be facing a serious contender in a business that provides it with a lion’s share of its revenues.
  • Secondly, Amazon is one of Google’s biggest ad buyers.

On the other hand, Amazon has a formidable task. Google’s AdWords has been around for 14 years – quite a head start.

Rumors abound that Amazon is working on a tool that allows advertising agencies to buy bulk advertising on behalf of thousands of their clients.

The term – online advertising – refers to placing adverts in any Internet venue. Examples include Emails, websites, mobile apps, software, and social media sites.