Could Amazon Ads be the next Facebook for Advertisers?

Amazon has become more than just an e-commerce business. Amazon Ads can now be considered a third major pillar of its business, along with e-commerce and cloud computing.

The company has been expanding its business of selling video or display ads and gaining ground on the industry leaders, Google and Facebook. Amazon Ads is worth about $125 billion, more than Nike or IBM.

How Amazon Ads does it

Amazon Ads has a really straightforward database and leverages what they know better than anyone: consumers’ online buying habits.

In addition to knowing what people buy, Amazon Ads also knows where people live and which credit cards they use. It knows how old their children are from their baby registries; in addition, Amazon knows who has a cold, right now, from cough syrup ordered for two-hour delivery.

Many of Amazon Ads’ features are similar to those of Google or Facebook. They offer ways to target users based on their interests, searches and demographics. But Amazon’s ad system can also remove a lot of the guesswork by showing ads to people who have bought the shirts on Amazon.com

Like other ad networks, Amazon uses cookies and other technical tools to track customers from its site onto other websites. Amazon does not tell the advertisers who that user is;  but, it does serve the ads on the brand’s behalf.

Targeting Capabilities

Amazon has given more advertisers access to the self-service system to run their own targeting campaigns on and off Amazon’s websites. Users of the self-service system can choose from hundreds of automated audience segments. Some of Amazon’s targeting capabilities are dependent on shopping behaviors, household demographics and media people consume.

Last year, Amazon released a tool similar to those used by some other ad networks. The tool is able to track how a particular ad placement leads to customers viewing a product on Amazon or buying it.

Advertising on Amazon has become insanely powerful. They can currently perform at a level that nobody else can come close to. And that is saying something.