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Amazon is sitting on a fat wad of customer information—237 million customer accounts currently, each telling a story of purchases and search patterns. But so far, the giant etailer has resisted trading in that data too much because they don't want to turn off customers who may be uncomfortable with their predilections being tracked and sold. But a recent article in the Seattle Times discusses how the company is getting more pressure from both its investors and brands to put that info up for auction—and is doing so very, very slowly.
One investor argues that for Amazon to continue offering competitive prices that undercut its competition—a strategy that grew the company to where it is today—it'll have to tap those dollars. Robert W. Baird & Co. analyst Colin Sebastian told Seattler Times, "If Amazon is going to hold the line on margins and continue to subsidize shipping, you'd like to see them pull the high-margin levers they have at their disposal. Advertising is a big one."
But Lisa Utzschneider, vice president of global advertising sales at Amazon Media Group, told the paper, "Customer trust is paramount to us. We would never do anything to infringe on that trust [...] We aspire to create relevant, meaningful experiences for our customers through advertising." Ads that people like or find useful has been the white whale of the internet for about the last fifteen years, so the company is still treading lightly. The site is still testing its own services by touching down in video content and grouping customers by purchase history before it sells ads, among other ventures. So while Amazon might be moving conservatively (relative to the potential that mound of customer data represents), it's "on pace to sell nearly $1 billion worth of ads this year." Imagine what that figure will be when the company moves full steam ahead.
· Amazon Easing Into $1B Sideline Business: Ad Sales [Seattle Times]
· Amazon Can Ship You Things Before You Purchase Them [Racked]
· Amazon Seeks to Bring J.Crew, Ralph Lauren to its Site [Racked]