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Retail, search and Amazon’s $40B ‘advertising’ business

ben-evans.com

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Re: Retail, search and Amazon’s $40B ‘advertising’ business

#11

Post by montagg »

jesuspiece wrote: post #2

This is egregious imo. Amazon needs to be broken up

Walmart too. And Target. And grocery stores.

I am not sure people are really prepared to take the implication of how unfair Amazon seems to its logical conclusion, because it means undermining a lot of what makes us comfortable in modern life under capitalism. Regulation targeted at increasing competition (breakups, rather than regulation Amazon as a monopoly of a kind and entrenching them) might result in a better outcome, or it just might make things more expensive and then you have to repeat the same breakup and regulation process again every 15 years.

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#12

Post by KVFinn »

irjustin wrote: post #8

Anecdotally, I was connected to a number of people on the Ads team and years ago, the upper ups in the G machine were already extremely nervous of Amazon's internal ads system. Google has been regularly losing marketshare to Amazon because people perform searches for products directly there when previously it was done through google-search.

>Google has been regularly losing marketshare to Amazon because people perform searches for products directly there when previously it was done through google-search.

Ironically Amazon has been so aggressive with the ads recently I've lost all trust in searching on Amazon itself. I'm back to using Google to find the Amazon product page.

On Amazon I search for a specific brand and model and it's on page 4, buried until endless sponsored products. I have to go my order history to find the product page now. Sometimes the Amazon search is not just all endless products but literally incorrect products, stuff that I would have to return if I bought it by accident. Like yesterday Amazon kept showing lightbulbs with the wrong physical socket size.

Amazon product search feels not just bad but actively hostile, something I have to fight against to find the thing I actually want.

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#13

Post by MangoCoffee »

cheeselip420 wrote: post #6

So the companies that sell on Amazon pay money to Amazon (from the revenues they get from Amazon's customers) to have their products listed more favorably than competitors (one of which is actually Amazon). I can see how this seems advantageous and monopolistic for Amazon...

https://smallbusiness.chron.com/requirements-getting-product...

"You may be required to pay a slotting fee to, in effect, purchase shelf space if there is a great deal of competition fighting for the same space."

no difference than paying for shelf space.

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#14

Post by prawn »

I've noticed Bunnings (like Home Depot, but in Australia) adding "Marketplace" listings for non-store things to their website. I assume that there's either an internal push to become more like Amazon, or consultants pitch this approach to them and it's hard to resist.

I wonder what the numbers are for supermarkets and the way they prioritise shelf placements? A friend had a big contract recently going around and hi-res photographing shelf-positioning in a massive supermarket chain. Every aisle. And then eye-scanning tests and analysis on legibility meant it was all used to upsell brands fighting for premium positioning.

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#15

Post by TheDong »

jesuspiece wrote: post #2

This is egregious imo. Amazon needs to be broken up

The retail and ads portions here seem inextricably linked. It does not seem possible to treat those as separate things.

What's more, if you tell amazon "no more retail ads", surely they can just do what normal stores do, and charge a slotting fee (https://en.wikipedia.org/wiki/Slotting_fee) instead.

If right now the first 10 results on amazon.com for "mattress" are all ads because those companies paid $1000 to be advertised first, how is that meaningfully different from amazon only carrying 10 mattresses at all, and instead of charging ad fees, charging a $1000 slotting fee to the mattress companies?

I am not particularly arguing for or against anything, just speculating that breaking it up would, in practice, be hard. Perhaps some other regulatory action would work better.

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#17

Post by spaceman_2020 »

irjustin wrote: post #8

Anecdotally, I was connected to a number of people on the Ads team and years ago, the upper ups in the G machine were already extremely nervous of Amazon's internal ads system. Google has been regularly losing marketshare to Amazon because people perform searches for products directly there when previously it was done through google-search.

Google should be nervous about all of its ads system because their search engine is becoming increasingly trash

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#18

Post by dralley »

jesuspiece wrote: post #2

This is egregious imo. Amazon needs to be broken up

Lots of these companies need to be broken up.

Facebook in particular given that their erroneous metrics literally put several media companies out of business. Not only did they charge for nonexistent engagement, but the BS engagement numbers they were providing were so enticing that it created a huge push towards expensive-to-create video content.

https://www.theverge.com/2018/10/17/17989712/facebook-inaccu...

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#19

Post by tyoma »

scarface74 wrote: post #10
cheeselip420 wrote: post #6

So the companies that sell on Amazon pay money to Amazon (from the revenues they get from Amazon's customers) to have their products listed more favorably than competitors (one of which is actually Amazon). I can see how this seems advantageous and monopolistic for Amazon...

Or the same thing every company in retail has done forever

Remember when Amazon listed private label brands, like every retailer has done for decades if not longer, and there was a collective freak out?

Re: Retail, search and Amazon’s $40B ‘advertising’ business

#20

Post by junofan »

TheDong wrote: post #15
jesuspiece wrote: post #2

This is egregious imo. Amazon needs to be broken up

The retail and ads portions here seem inextricably linked. It does not seem possible to treat those as separate things. What's more, if you tell amazon "no more retail ads", surely they can just do what normal stores do, and charge a slotting fee ( https://en.wikipedia.org/wiki/Slotting_fee ) instead. If right now the first 10 results on amazon.com for "mattress" are all ads because those companies paid $1000 to be a…

There’s a $40bn/yr business here. I’m sure somebody can figure out how to decouple.

Also, many breakup scenarios for Amazon involve spinning out the fulfillment business. Who cares if Amazon.com stocks 10 mattresses if I can just build a competitor stocking 10,000 while using the same infrastructure.

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