Amazon Takes on Google and Facebook in Advertising Pilot

Over the last 12-months, Amazon has reported triple-digit growth in its advertising business, with its ad revenue projected to reach $10 billion in the coming months. Until recently, however, the marketplace that is known for its domination of the digital sphere has focused on traditional display, video and search advertising. According to a report that first appeared on Axios, the e-commerce giant is now using consumer data to send free product samples to customers.

There has been a lot of talk around how retailers use consumer data, with shoppers from Australia, and across the world indicating they would like more transparency and control over how their data is used. Amazon, seemingly unconcerned by this, is piloting a program that utilises this data to send product samples to customers, based on their product preferences.

Why is Amazon suddenly doing this? As the company continues to put effort into becoming a go-to advertising supplier, the biggest hurdle it faces is competing with the likes of Google and Facebook. By leaning on its existing consumer data, delivery network, and large subscriber-base, Amazon is able to offer brands something digital advertisers can’t – dissemination of targeted product samples.

“Having this huge installed base of users, or really Prime subscribers, and putting something in the box that people will have a high proclivity for liking — that seems like a brilliant Amazon strategy,” Rich Greenfield, the managing director and media analyst at BTIG told Axios.

Not to mention, the service offering is really quite simple. Throwing back to the days when companies would put product samples in the letterbox, or magazines would offer free samples based on what they thought readers would like, Amazon’s strategy is not dissimilar to what has been done a million times before.

Hidden deep within Amazon’s legal terms for advertisers is a note that reveals the possibility for advertisers to deliver product samples to relevant consumers within Amazon’s shopping network. Essentially, the advertiser will deliver their product sample to a designated place specified by Amazon, and the online marketplace will then determine which customers would be most likely to make a purchase after receiving a sample, and those shoppers are sent a surprise package in the mail.

While Amazon hasn’t publicly advertised this offering, social media users have been jumping online to share the “random” packages they’ve been sent by Amazon.

“Amazon sent me a random coffee sample! Is it because I have like 15 different types of coffee in my cart?” one user posted to Twitter.

To test out the accuracy of these statements, Axios reportedly created an Amazon account and reviewed their account settings, discovering an option to opt in or opt out of receiving product samples. When user accounts are created, they are automatically opted in to receive goods.

So far, Amazon has declined to comment on the program, or the repercussions this could have as customers become increasingly wary of how their data is being used.

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