Good piece from CNBC about how Amazon went from being a company that disdained conventional advertising to one that last year bought $1.8 billion worth of ads, up more than 70 percent from the year before, making it the fifth largest advertiser in the US.
Amazon founder/CEO Jeff Bezos once was quoted as saying that ads are “the price you pay when your product is unremarkable." But how he seems to have recognized that as his company’s business has matured and can benefit from mainstream appeal that can be generated through mass media, advertising can play a role.
CNBC writes: “Bezos’ about-face on advertising reflects the dramatic change in Amazon's business, which is no longer predominantly an e-commerce marketplace. While most of its revenue still comes from online sales, Amazon now has a whole portfolio of branded products and services that consumers and businesses need to see on TV ads and elsewhere. The four companies ahead of Amazon are Procter & Gamble, AT&T, Berkshire Hathaway (owner of brands including Geico, Kraft Heinz and Fruit of the Loom) and Comcast.”
There’s also a defensive play for Amazon: Joe Swallen, chief research officer at Kantar, tells CNBC that as “Amazon is becoming more of a product company, it also has to invest more in defending its own turf because Walmart, Target and Best Buy are stepping up promotion of their online commerce businesses.”
Amazon founder/CEO Jeff Bezos once was quoted as saying that ads are “the price you pay when your product is unremarkable." But how he seems to have recognized that as his company’s business has matured and can benefit from mainstream appeal that can be generated through mass media, advertising can play a role.
CNBC writes: “Bezos’ about-face on advertising reflects the dramatic change in Amazon's business, which is no longer predominantly an e-commerce marketplace. While most of its revenue still comes from online sales, Amazon now has a whole portfolio of branded products and services that consumers and businesses need to see on TV ads and elsewhere. The four companies ahead of Amazon are Procter & Gamble, AT&T, Berkshire Hathaway (owner of brands including Geico, Kraft Heinz and Fruit of the Loom) and Comcast.”
There’s also a defensive play for Amazon: Joe Swallen, chief research officer at Kantar, tells CNBC that as “Amazon is becoming more of a product company, it also has to invest more in defending its own turf because Walmart, Target and Best Buy are stepping up promotion of their online commerce businesses.”
- KC's View:
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The thing is, Amazon’s ads tend to be pretty good … they’re smart, and even a little subversive. Witness its Super Bowl commercial with Harrison Ford for its Alexa system …. it just works, and shows a sense of humor about its own products. That’s enormously appealing, I think.
