Author Topic: AMZN - Amazon.com Inc.  (Read 567274 times)

Libs

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Re: AMZN - Amazon.com Inc.
« Reply #2240 on: January 17, 2019, 05:25:47 PM »
Can someone explain something to me like I'm six years old. I know nothing about advertising ( other than belatedly realizing it's power via the ascendancy of GOOG and FB).

If I'm an advertiser, wouldn't AMZN be a superior site to Google or FB? People are specifically going to AMZN to shop. For a specific product. Wouldn't that be the first choice for ad placement?
I know ad revenue is growing rapidly at AMZN, but why aren't these revenues much bigger already?
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valueinvestor

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Re: AMZN - Amazon.com Inc.
« Reply #2241 on: January 17, 2019, 05:34:03 PM »
Can someone explain something to me like I'm six years old. I know nothing about advertising ( other than belatedly realizing it's power via the ascendancy of GOOG and FB).

If I'm an advertiser, wouldn't AMZN be a superior site to Google or FB? People are specifically going to AMZN to shop. For a specific product. Wouldn't that be the first choice for ad placement?
I know ad revenue is growing rapidly at AMZN, but why aren't these revenues much bigger already?

This is because the average person is average. There were people who were still running radio ads in the age of television. There were people who bought IBM because no one get's fired from buying IBM, the revenues are mostly from ambitious entrepreneurs that are capitalzing on a huge opportunity. Funny enough - Amazon was Google's biggest ad customer. Although I have no basis for this, I do not think I'm that far from the truth. More than happy to be proven wrong.

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #2242 on: January 18, 2019, 05:46:08 AM »
Can someone explain something to me like I'm six years old. I know nothing about advertising ( other than belatedly realizing it's power via the ascendancy of GOOG and FB).

If I'm an advertiser, wouldn't AMZN be a superior site to Google or FB? People are specifically going to AMZN to shop. For a specific product. Wouldn't that be the first choice for ad placement?
I know ad revenue is growing rapidly at AMZN, but why aren't these revenues much bigger already?

For certain things, specifically products, yes, it probably ranks very high. But there are other kinds of advertising. If you sell car insurance or house construction services, then Google is probably the place for you. If you want to do brand advertising, then maybe Facebook/Instagram/Youtube would be the preferred choices, etc.

But it mostly depends on the ROI you're getting, so if you're advertising on a site that isn't ideal, but the auction prices are such that you get a better ROI, then you'll do that too. So maybe Amazon is more logical to advertise a widget, but if Google Adword prices for that keyword are much lower than Amazon, it might still be a better place for you specifically.
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KCLarkin

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Re: AMZN - Amazon.com Inc.
« Reply #2243 on: January 18, 2019, 06:35:34 AM »
If I'm an advertiser, wouldn't AMZN be a superior site to Google or FB?

As Liberty mentioned, the things advertised on AMZN tend to be products. These are usually low value, low margin, one time purchases. The lifetime value (LTV) for a new customer is very low. This is especially bad on Amazon since the marketplace is so competitive.

Things like auto insurance, SaaS, travel, realtors, have much higher LTV. So advertisers are able to spend much more on ads and still get a good ROI.

Libs

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Re: AMZN - Amazon.com Inc.
« Reply #2244 on: January 18, 2019, 11:16:29 AM »
Larkin, Liberty, value - thank you. Very helpful.
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