Amazon is moving into advertising in a big way. The implications and opportunities of such a shift are profound, but there are also risks. Will consumers accept ads on Amazon’s platform? If they do, what does that mean for small businesses on Amazon’s platform? How will big businesses use the platform? What does this mean for Amazon’s competitors? It is still early days here, but this is a trend all investors should be watching. The WSJ has the story.
“I think the giant has been awoken,” said Bill Wise, chief executive of Mediaocean, a software platform that processes over $150 billion of ad spending annually.
While Amazon has rapidly expanded into a number of new businesses in recent years, including groceries, entertainment and pharmaceuticals, its ad business has grown organically into a high-margin business. Its planned headquarters in New York City will give it a new, stronger tie to the traditional center of advertising, one that could lead to Amazon hiring away talent.
Meanwhile, the world’s biggest ad agencies are racing to become specialists in how Amazon wants to do business, which is unlike anything they’ve seen before.
Read more here.
Jeremy Jones, CFA
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