Tags: amazon | ad | business | buy | consumer

NYT: Amazon Building Big Ad Business From What You Buy

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By    |   Tuesday, 22 January 2019 10:59 AM

Online-retailing titan Amazon.com Inc. reportedly is building a profitable advertising business essentially by cashing in on consumers’ online buying habits.

Ads sold by Amazon (AMZN), 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, the New York Times expalined.

“Amazon’s advertising business is worth about $125 billion, more than Nike or IBM, Morgan Stanley estimates. At its core are ads placed on Amazon.com by makers of toilet paper or soap that want to appear near product search results on the site,” the Times explained.

“But many ad agencies are particularly excited by another area of advertising that is less obvious to many consumers. The company has been steadily expanding its business of selling video or display ads — the square and rectangular ads on sites across the web — and gaining ground on the industry leaders, Google and Facebook,” the Times said.

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.

“That is where the insane scale can happen for the business,” said John Denny, a vice president at CAVU Venture Partners, which invests in consumer brands like Bulletproof coffee and Hippeas chickpea puffs.

Meanwhile, investors have questioned how the impending divorce of company founder Jeff Bezos would affect his control of the most valuable company on Wall Street and its ambitious expansion plans, Reuters explained.

Bezos, whom Forbes lists as the world’s richest person, worth an estimated $136.2 billion, said via Twitter on Wednesday that he and his wife of 25 years, MacKenzie, will divorce. Amazon shares were down 0.5 percent in afternoon trading on Thursday, after gaining earlier in the session.

The split throws into question how the couple will split their fortune, which includes an approximately 16 percent ownership stake in Amazon’s roughly $811.4 billion market capitalization. Divorce laws in Washington state, where they live, hold that property acquired during a marriage is generally divided equally between spouses.

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Online-retailing titan Amazon.com Inc. reportedly is building a profitable advertising business essentially by cashing in on consumers’ online buying habits.
amazon, ad, business, buy, consumer
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2019-59-22
Tuesday, 22 January 2019 10:59 AM
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