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Amazon may be the world's online consumer retail giant, but don't let that fool you: the company isn't content with being the Walmart of the web.
Already, Amazon has become a leading player in the cloud computing space, and in 2013, it's coming to Madison Avenue, perhaps in a big way.
According to a report published in Adweek, the Seattle-based company will jump into the real-time bidding space next year with the launch of its own RTB platform. Adweek's Tim Peterson has the details:
Over the past year, Amazon has built a proprietary real-time bidding platform that plugs into exchanges and supply-side platforms, including Google’s AdX and PubMatic. This platform lets the company retarget its users across the Web based on their browsing and purchase habits on Amazon’s owned-and-operated properties.
Amazon began testing its platform this year, but in 2013 will make it available in a self-serve fashion to media buyers so that they can manage their own media buys.
It's all about the data
Adweek's Peterson says that Amazon's platform "could be a game changer" and it's not hard to understand why: Amazon's huge database of customer purchases gives the company a compelling differentiator as it enters a fast-growing yet still-confusing space.
According to Adweek's sources, Amazon won't let media buyers using its platform tap into purchasing data on an individual consumer basis, but the data it will provide will be no less appealing:
...according to trading desk executives with knowledge of Amazon's plans, the platform is expected to let buyers leverage Amazon’s valuable data—to an extent. The self-serve RTB platform would hypothetically function similarly to Facebook's Ads Manager in terms of how buyers could target their ads. Sources said Amazon is extremely protective of its data and wary of providing outside access, so like Facebook, Amazon's platform would enable buyers to create targeting segments such as "men; aged 25-34; in California; interested in high-definition TVs; who have purchased how-to books and home improvement tools.
The "have purchased" part is obviously the key. As Scott Symonds, MD of AKQA Media noted, "What's so powerful is having revenue data and action data on purchases." And arguably nobody has as much of that data as Amazon, which will make its platform a can't-ignore in the RTB market.
Could Amazon be a bigger threat to Google than Facebook?
Needless to say, Amazon's 2013 moves in the ad space will be closely watched by many. But one company might want to pay especially close attention. That company? Google.
Much has been made about the threat Facebook poses to the world's leading search engine. Facebook's ability to become a search behemoth itself has been the subject of much debate, and the recent reports that Facebook may be gearing up to launch an AdSense-like ad network will obviously be of some concern to the Mountain View company.
But Facebook's ability to map its treasure trove of social data to intent has not been proven, and when it comes to intent, Google may have reason to worry more about Amazon. As Jonathan Adams of iCrossing told Adweek, "Search behavior is not the same as conversion data. These guys have been watching you buy things for...years."
Put simply, Amazon's data reflects more than just intent; it reflects action. That, in theory, could give it the potential to do for media buyers what Google does, only in some cases, better. Obviously, Amazon's foray into the RTB space isn't a direct assault on Google's search dominance, and the nature of search is hard to compete with, but Amazon's application of purchasing data could, for some advertisers, make the world outside of search a lot more interesting.