Amazon has been steadily growing its advertising offerings to make it a third major pillar of its business, by taking advantage of the huge amount of data the e-commerce giant knows about your buying habits.
Estimated to worth about $125 billion, Amazon.com's advertising business offers advertisers almost everything other major online networks such as Google and Facebook s are offering - like offering ways to target users based on their interests, searches and demographics. But Amazon’s ad system can also remove a lot of the guesswork by showing ads to people who have actually bought a product that will be advetised.
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.
The company has been also expanding its business of selling video or display ads, gaining ground on the industry leaders, Google and Facebook.
Over time, Amazon has given more advertisers access to a self-service system to run their own targeting campaigns on and off Amazon’s websites, and at a variety of spending levels. Some of Amazon’s targeting capabilities are dependent on shopping behaviors, people who have bought a specific product in the past month, or household demographics. Others are based on the media people consume on Amazon, such as people who have recently streamed fitness and exercise videos on Amazon.
Of course, Amazon is also using more "traditional" ways of targetting users, such as cookies. These small piece of code stored in users's devices are tracking them, providing advertisers valuable information such as if a person who recently bought a protein bar is now reading news on Bloomberg could be targeted on that site with an ad for a diet book.
Last year, Amazon also released a tool similar to those used by some other ad networks. That tool embeds a piece of computer code known as a pixel in ads shown on other sites, and tracks how that particular ad placement leads to customers viewing a product on Amazon or buying it outright.
Amazon also allows advertisers to upload their own customer lists, which Amazon matches with its database, and then show ads to those customers, or other people Amazon’s algorithms determine are "matching."
Many services and sextions of Amazon.com's website can also be used to extract valuable information about users and their shopping behavior. For example, Amazon’s website has a section called “Garage,” where customers can submit their car’s make and model information to make sure they buy parts that fit. In 2015, Amazon used Garage data to help an auto insurer target specific customers. Currently, brands can choose to show ads to drivers who have a Mercedes as opposed to people who have a BMW via Amazon’s ad portal.
People who do a lot of research on products may see an ad that features positive product reviews, whereas those who have signed up for regular deliveries of other products in the past might see an ad offering a discount for those who “Subscribe & Save.”