The Amazon Selling Machine

from The Atlantic

The e-commerce company has so much information about us that it’s become expert at shilling us things we didn’t even know we needed. No wonder its advertising business is booming.

What if there were a company that knew what you wanted to buy before you did? What if it made shopping recommendations that tapped into your deepest desires? Better yet, what if it then made buying completely seamless? Would you ever stop shopping?

Amazon shareholders may like the answers to those questions. The company that revolutionized the way we buy has now gotten serious about selling the ads that tell us what to buy in the first place. It is selling advertising on Amazon.com, encouraging brands to create Alexa “skills” so they can market to people when they’re at home, and putting targeted ads on the main screens of its Amazon Kindles, tablets, and televisions. And it’s attracting money that brands used to spend on Facebook and Google.

On Thursday, Amazon reported that the category of its business devoted to advertising and “sales related to our other service offerings” made nearly $2.5 billion in net sales in just the third quarter of 2018. In the third quarter of 2017, it made less than half that, $1.12 billion. A September report from eMarketer estimated that Amazon is now the No. 3 digital-ad seller in the country, behind Facebook and Google. Brands will spend $4.61 billion advertising on the Amazon platform this year, the report estimated. Mike Olson, an analyst with Piper Jaffray, anticipates that Amazon’s advertising revenue will reach $8 billion this year, a number that will double to $16 billion by 2020, and that will soon overtake in profitability Amazon’s big moneymaker, Amazon Web Services, which sells cloud-computing services.

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51 Responses to The Amazon Selling Machine

  1. Kevin Metz May 3, 2019 at 7:38 pm #

    This article discusses Amazon’s latest technology, Alexa. With a simple WiFi connection, Alexa has the ability to answer almost any question, set timers, and add to your shopping list amongst other things. What is currently on the rise is Alexa’s ability to analyze your voice input and determine whether you may be sick or depressed and recommend medication based on your physical or emotional condition. Although this may seem useful to some, it can be a considered a violation of privacy to others. Essentially, how this would work is Alexa would have to first familiarize with a person’s normal voice. Then, based on noticeable changes in pitch, jittering, and harmonicity, the device could have the ability to offer having medication delivered within just a short amount of time. This can also influence the ads that are provided to the user. The way in which technology has advanced over time is shocking. In my opinion, such devices as Alexa seem to pave the way toward a world in which robots actually exist. Sure, there are some traditional people that have not yet caved when it came to purchasing an Alexa, but there are many who have become reliant on this device. With each new TV commercial, just when you thought Alexa could do it all, the device can now do something else. I’d be amazed by Alexa’s ability to analyze voice input, but I’m not too sure if I would take her recommendation over taking a trip to the doctor’s office.

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