Only Google & Facebook Have Bigger Ad Market than Amazon; 'Storefronts' Helps Amazon’s SME Image

Amazon 2019

RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Only Google & Facebook Have Bigger Ad Market than Amazon; ‘Storefronts’ Helps Amazon’s SME Image; Amazon Employees Accepting Bribes for Data.

Only Google & Facebook Have Bigger Ad Market than Amazon

Amazon is expected to move ahead of Microsoft and Oath into third place in the U.S. digital ad market, according to a report released Wednesday by the research firm eMarketer.

More people are starting their searches for products on Amazon instead of Google or another search engine, the report said. That means advertisers are willing to pay more to show up in keyword searches. Amazon is projected to have a 4.2% share of the market this year; compared with 4.1% for Microsoft, which owns MSN, the Bing search engine, and LinkedIn; and 3.3% for Oath.

Amazon will still trail industry leaders Google and Facebook by a wide margin. Those two control a combined 57.7% of the market. Google is the leader with a 37.1% share, while Facebook has 20.6%. But their combined market share is expected to drop from 59.1% last year.

Amazon may be partly to blame for that decline. eMarketer predicts Amazon will generate USD$4.6bn (£3.5bn) in U.S. online ad revenue this year, up substantially from the USD$2.9bn (£2.2bn) eMarketer had forecast in March.

And much of that growth is in mobile. Amazon is expected to have USD$1.6bn (£1.22bn) in mobile ad sales this year, up from less than USD$500m (£378m) last year. eMarketer is predicting that Amazon’s mobile ad revenue will surge to USD$2.9bn (£2.2bn) next year and USD$4.8bn (£3.6bn) by 2020.

‘Storefronts’ Helps Amazon’s SME Image

Amazon’s new hub for SMEs, ‘Storefronts’, has launched. The page features 20,000 businesses across categories like Home, Books, Jewellery, Electronics, and Beauty. It’s limited to U.S.-based businesses and Amazon says it has sellers from all 50 states.

The listings featured in the curated store include third-party sellers that sell and ship themselves, sellers utilising the ‘Fulfilment by Amazon’ programme, and sellers that have a direct retail traditional relationship where Amazon sells and ships the items.

Amazon will feature the included businesses in marketing for the new initiative. The Storefronts page will feature new businesses weekly, and customers can click through on products to learn more about the companies.

The new Storefronts campaign is another initiative intended to drive customers towards items from third-party sellers and promote the idea that Amazon is a “big collection of small”. The brand claims that half of everything sold on the site is from a small or medium-sized business. It’s also likely a move to help turn around Amazon’s reputation as a small-business killer. According to Amazon’s own report, the company has created 900,000 jobs for small businesses.

Amazon Employees Accepting Bribes for Data

Amazon employees in China are participating in schemes to provide sales data and other internal information to sellers, as well as to delete negative reviews and to restore accounts that have been banned from the site, the Wall Street Journal reports. The activity appears to be quite sophisticated, with brokers making deals for employees, who make from USD$80 (£60) to more than USD$2,000 (£1,513) on such activities, according to the report.

Third-party brokers allegedly recruit Chinese Amazon employees via apps like WeChat. They then act as a middleman, negotiating deals – often in the form of packages. For example, the Journal wrote that a minimum of five deleted reviews for USD$300 (£228) apiece (a total of USD$1,500 [£1,140]) tends to be standard.

Other types of internal data include the email addresses of reviewers, who merchants can then reach out to in an attempt to curry favour with tactics like offering free or discounted products, as well as “proprietary sales information”, including keywords, sales volume, and buying habits. Having access to this information allows sellers to game the system by optimising their listings to reach more customers. At a recent third-party conference, the Journal wrote, one presenter allegedly even pulled up internal information that they said ran for USD$80 on the black market.

Amazon has flagged a number of cases involving its employees – at least a few of whom are in the U.S. – as well as “shuffled the roles of key executives in China” to stop the misconduct, the paper added. In a statement to the Journal, an Amazon spokesperson wrote: “We hold our employees to a high ethical standard and anyone in violation of our Code faces discipline, including termination and potential legal and criminal penalties.”