Amazon Changes Terms for Retailers Ads on Its Site

Aug 13, 2015

The change is expected to take effect on October. 31, after which advertisers will no longer be able to post the Product Ads that are proving to be very lucrative for small businesses that are selling their products on their own websites outside of Amazon.

Scot Wingo, the executive chairman of ChannelAdvisorthat assists manufacturers and retailers to sell on ecommerce platforms, said that consumers performed highly well with it as it offered a middle ground of being able to collaborate with Amazon but also not letting them to observe all their transaction data.

Wingo added that the program was famous for its large conversion rate and advertisers were startled when they got an email from the e-commerce giant informing them of the change.

Amazon still promotes two ad programs for sellers on its site: Product Ads (which is going away by the end of October); and Sponsored Ads, which send shoppers who click on the ads to the merchants' listings on Amazon.com.

"At Amazon we're continually reviewing the providers we provide companions to assist them greatest attain our buyer base and develop their companies", the corporate stated in an e mail to Reuters.

In a Wall Street Journal story, it offers one potential explanation for Amazon's sudden decision: Google.

Amazon does not break out its advertising sales in its financial results, however, it's presumed by many to be a significant and growing business as it experiments with other forms of advertising. A survey by Amazon and Pymnts.com revealed that 64% people begin a product search from a marketplace, followed by their favorite websites, social media and search engine.

Source: TheWeatherSpace.com

Google Inc, which announced this week it will morph into a new holding company called Alphabet Inc, has acknowledged the dominance of Amazon, with executive chairman Eric Schmidt calling the online retailer its biggest competitor in searches.

eMarketer estimated that AMZN's total ads business could generate $1.26 billion this year and can expand to $1.83 billion by 2018. eMarketer gives predictions by tracking online advertising.

It was a pay-per-click service which played into the hands of companies aware that users will occasionally head to a marketplace like Amazon or eBay for product inspiration before purchasing elsewhere. Facebook also launched targeted products ads in February.