Amazon is a media beast. Amazon is just getting started.
In 2012, I published an article titled, Is Amazon The Future Of Media? From the piece:
“While people wax poetic about the retail prowess and clout of Amazon, I am always quick to point out that they are one of the most fascinating media companies that has ever been created. Marketing professionals and luddites alike typically stare at me the way that a dog does when you try to talk to it. What the majority of people don’t know is that Amazon is able to undercut so many retailers not just because they have a more streamlined or technologically advanced supply chain system, but because each and every customer also provides Amazon with a significant amount of media revenue per user that eclipses most other media properties (let alone competitive online retailers). I have no formal proof of this – and Amazon is very quiet about how media is played on their site and partner sites – but industry insiders from all corners have all conferred that Amazon gets a lot of media dollars per user, and is able to optimize that number by constantly and consistently putting highly targeted and relevant offers in front of them.”
It’s five years later.
A few days ago, CNBC published the news item: Amazon’s growing advertising clout threatens the dominance of Google and Facebook, says analyst. From the piece:
“Amazon’s advertising business is growing fast enough that it threatens the dominance of Google and Facebook, according to BMO Capital Markets.
The company’s ad business is ‘gaining significant momentum’ and will take market share from Google, Facebook, and others… The advertising segment of e-commerce giant Amazon’s business model has the potential to grow sales by 65 percent in 2017, reaching $3.5 billion… ‘A key point of differentiation for Amazon [from competitors] is the massive amount of consumer purchase data it possesses.'”
It’s easy to look at Google… it’s easy to look at Facebook. Dig deep into Amazon and the media story is more fascinating than ever before.
The article goes on to make the argument that Google knows what you’re searching for, and that Facebook knows what people are interested in (and who they are connected to), but Amazon knows what they’re shopping for. That’s fairly elementary. Amazon has become a beast of a search engine. If someone is looking for anything to purchase, they use Amazon (over Google) for their searches. This is profound. Amazon’s marketplace also enables vendors (not just Amazon) to build and stock their own stores. Amazon also has a lot of personal information (and who it’s connected to). Think about wishlists, gifting friends and being able to pull that data together.
It goes even deeper.
Think about AWS (Amazon Web Services), and how much of the Internet it powers through this early investment and constant innovation in the cloud computing space. Gartner is now predicting that about 30% of all searches will be done without a screen in the next four years. Voice is driving the next generation of navigating technology, and Amazon is one of the significant leaders of voice with its Alexa platform, and their line of Internet of Things voice-control hardware for the home and office. Think about the data, information and analytics that Amazon will be soon be collecting based on voice commands (and listening to those enviornments).
Amazon is a juggernaut. Not just in retail, but in disruption, innovation and understanding consumer behaviour. Don’t think – for a second – that the media play is not going to quickly become a significant component in everything that Amazon does. Amazon has search. Amazon has deep understanding of consumer’s needs and wants. Amazon knows who those consumers are connected to. Amazon knows which web services these consumers use. Amazon knows much more than most of us will ever know. There are more pieces to this puzzle (look at their acquisitions over the years).
If that isn’t the recipe for a beast of a media company, I don’t know what is.