Many local retailers are justifiably concerned about the full-throated arrival of Amazon into the local market, but it turns out there is another group with just as much to lose and less capacity to lose it: publishers.
Reports from the US suggest the e-commerce giant is ramping up its advertising efforts, with a view of mining the rich revenue streams already tapped by Google and Facebook.
Those two businesses already capture 90 per cent of the new online ad dollars coming into the US market (expect markets like Australia to reflect this in the medium term).
Like its two giant rivals, Amazon has something that what remains of analogue media could never bring to play in the advertising markets: actionable data.
As Shareen Pathak writing in DigiDay notes, Google has search data and Facebook knows interest levels, and Amazon “… has real power because it knows what people are buying and how they’re doing it.”
Local media operations, already fighting over the scraps, are going to struggle. Against the insights and capabilities of these huge walled gardens, television networks have gross rating points, and traditional news media outlets have questionable panel data that almost certainly overstates their audience. Where would you bet your house?
Seriously, where would you bet your house?
As Amazon notes in its advertising pack, “… its advertising data reflects behaviours of billions of customers shopping experiences as they research, consider and purchase products both on and off Amazon — all at scale.”
Each month the company attracts 180 million unique visitors, and it is able to track logged-in users as they move around inside the machine, allowing for powerful segmentation.
It can target consumers based on their search and purchase history and context based on the page they are viewing. And it offers lookalike and retargeting options for marketers along with the obvious demographic and geographic data.
Google and Facebook are the obvious incumbents to steal market share from, but struggling publishers are likely to be collateral damage if these three giants go head to head in a battle that will drive further innovation around service levels and the exploitation of data.