business news in context, analysis with attitude

The Wall Street Journal reports on a number of retailers “that have joined a new marketplace allowing advertisers to buy and insert paper ads in customers’ boxes.”

That’s right. Now, when these retailers - there apparently are more than two dozen - ship you something, included in the box will be ads that are paid for by other businesses.

The Journal writes that “the rise of online shopping has taken a toll on retailers as shipping costs and investments in e-commerce capabilities have cut into profits. Retail margins on average fell to 8% last year from 10.2% in 2012, according to consulting firm AlixPartners. Over that period, e-commerce sales expanded to 17.6% of total sales from 10.5%.

“Retailers hope they have a remedy: Wring more money out of the space inside the box.”

Apparently the system is designed so that “retailers can break up the volume of packages into segments, smaller brands and niche advertisers are able to buy inserts.”


Advertising Age has a story about how Amazon is seeking ways that it can extend its Sponsored Products category beyond its own site, “delivering them to outside websites by retargeting consumers who visit Amazon.”

The Ad Age story explains it this way:

“Sponsored Products is one of the main ad formats on Amazon's platform. It lets brands run campaigns pegged to the terms that consumers search for, similar to the search ads that made Google fantastically rich in the open web. Brands target the ads based on keywords that reveal exactly what Amazon users are in the market to buy. They appear sprinkled within search results and individual product listings.

“Now, those ads will also appear on websites within Amazon's advertising marketplace, which connects to top publishers. People who click on the ads will be delivered to brands' storefronts back on Amazon.”

Everybody who goes online is familiar with how this works, even if unfamiliar with the technology backbone that makes it possible. For example, you see an item of clothing on a website, and suddenly it seems to be popping up everywhere you go online, reminding you that it is available to be purchased.

Amazon has not commented on the story, though sources tell Ad Age that the program could launch within weeks.
KC's View:
I’m sorry, but I’m not buying. Not even a little bit.

I understand that these bricks-and-mortar stores want to generate more revenue, but selling access to my eyeballs ought not be one of the ways they do so. I don’t mind if they send me promotional materials for their own products, but turning the inside of their boxes into a paid advertising medium strikes me as way, way beyond reasonable. The very idea just ticks me off.

As for Amazon … I would suggest to them that they ought to heed the Jurassic Park lesson - just because you can do something doesn’t mean you should do something. I’m less annoyed by the Google remarketing program than some people I know - Mrs. Content Guy, for one, finds it really annoying - but even I can get irritated when bombarded by messages related to previous visits to certain web pages. And sometimes I get irritated enough that I make the decision not to buy anything promoted in these messages … just because I can.

Could we somehow at least have an opt in/opt out feature?

Maybe this could be a place in Amazon’s ecosystem where customers are safe from being barraged with commercial messages. And maybe, just maybe, this would make its hold of its customers even stronger, not weaker.