business news in context, analysis with attitude

…with brief, occasional, italicized and sometimes gratuitous commentary…

• The New York Times has a story about Amazon’s advertising business. An excerpt:

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

“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.

“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.”

You can read more about the service here.

This is yet another example of the kind of muscle that Amazon exercising in various segments. The Wall Street Journal had a story the other day about how Amazon;’s private label book business - operating 15 separate imprints under the Amazon Publishing banner, publishing more than 1,200 titles in 2017 alone - is able to push and pull “promotional levers that Amazon has built to lure consumers” to “boost the opportunities of little-known writers and recharge the careers of experienced authors.” I think the really important part of that sentence is how Amazon can push and pull levers it has developed, and to which it has exclusive access.
KC's View: