Amazon’s Big New Business
Amazon knows where people live, what credit cards they use, how old their children are and even if they have a cold right now
According to The New York Times, ads sold by Amazon, once a limited offering at the company, can now be considered a third major pillar of its business, along with e-commerce and cloud computing. Amazon’s advertising business is worth about $125 billion, more than Nike or IBM, Morgan Stanley estimates.
When a chain of physical therapy centers wanted new patients, it aimed online ads at people near its offices who had bought knee braces recently on Amazon.
When a financial services provider wanted to promote its retirement advisory business, it directed ads to people in their 40s and 50s who had recently ordered a personal finance book from Amazon.
And when a major credit card company wanted new customers, it targeted people who used cards from other banks on the retail site.
The advertisers found those people by using Amazon’s advertising services, which leverage what the company knows better than anyone: consumers’ online buying habits.
In addition to knowing what people buy, Amazon also knows where people live, because they provide delivery addresses, and which credit cards they use. It knows how old their children are from their baby registries, and who has a cold, right now, from cough syrup ordered for two-hour delivery. And the company has been expanding a self-service option for ad agencies and brands to take advantage of its data on shoppers.
Like other ad networks, Amazon uses cookies and other technical tools to track customers from its site onto other websites. They let the company know that a person who recently bought a diet book is now reading news on CNN and could be targeted on that site with an ad for a protein bar. Amazon does not tell the advertisers who that user is, but it does serve her ads on the brand’s behalf.
