Amazon.com’s subsidiary A9.com has built a new pay-per-click (PPC) advertising network called Clickriver. Clickriver will allow advertisers to display text ads alongside Amazon.com’s product pages and search results. This service will compete with the likes of Google AdWords, Yahoo! Search Marketing, and many others — although Clickriver at launch will only serve ads to Amazon.com-owned websites.
Being listed as a “related item” on a popular page can be a huge boon for sales – and with this move Amazon is effectively turning that advantage into a commodity. There’s something cannibalistic about that, but it could generate a lot of revenue. I think it’s fascinating. The service is currently accepting applications for its closed beta. Update: Amazon contacted me to clarify that advertised products must be complementary, sold off-site and not in competition with what Amazon is selling. I apologize for getting it wrong.
In time, some third party services will also sell ads on Amazon pages, the Clickriver site says. Amazon’s A9 recently shelved some of its most high profile features, like street level photos integrated with map search. This should be a far more profitable direction for the A9 team to pursue.
Steve Poland assisted with this write up but thinks Clickriver is a waste of resources that a partnership could have precluded.
I just personally disagree with them starting their own PPC network — it takes headcount for all the client issues (’my ad doesn’t appear’), ensuring click fraud isn’t happening, etc. Ditto on when they rolled out A9.com — rather than partnering with Google or Yahoo. But yes, great that they are opening up Amazon.com to ads.
More of my notes on this:
This service will compete with the likes of Google AdWords, Yahoo! Search Marketing, and many others — although Clickriver currently will only serve ads to Amazon.com-owned websites.
Clickriver mentions that 3rd-party networks will also be supplying ads to these Amazon.com pages, which guarantees Amazon.com a starting inventory of ads once they launch out of beta. The question is who those 3rd-party networks are and why Amazon.com didn’t go exclusive with one them, rather than build-out their own PPC system. Last week, Amazon.com was slammed on Mad Money TV by Jim Cramer, saying that “Amazon’s management is focused elsewhere,” pointing out that Bezos is building a spaceport. However, creating Clickriver doesn’t come as much of a surprise, as Amazon.com has proven in the past that they’re willing to build, rather than exclusively partner — such as the web search on Amazon.com being their own A9.com, which hasn’t been able to compete with the larger search engines. The PPC space is already crowded and although I question how many advertisers will sign-up for this service, I’m sure there are many that would love to get on Amazon.com, which works towards offering “Earth’s Biggest Selection.”
You may recall that another large commerce-driven website, eBay, chose to exclusively partner, rather than build, by announcing that Yahoo would supply PPC ads to their US site and that Google would supply PPC ads to eBay’s international sites.
Is this not a further indication of the importance of revenue income? I mean that is even what Google is really all about, not “search” but rather “Ad Revenue” – Is Google not one of the biggest Internet Ad Companies out there? What Say You?
I can’t see this being a good thing. Let’s think this through….pretending Amazon as real store with real sales people.
You: Hi I like this mp3 player but do you have any other suggestions?
Sales Rep (thinking in head): hmm who has paid me the most to recommend them.
Sales Rep: Zune is much better.
You: Are you sure? My kid said the Zune is a useless brick!
…
Amazon’s clickriver will probably end up destroying and replacing its semi-neutral recommendation with a system that we can’t trust.
Something with a swelled head is about to start eating its young. I agree with #1 & #3 – you cannot compromise your very foundations for what I think will be negligible revenue stream to Amazon… considering Google, Yahoo and MSN are not going anywhere.
Amazon needs to focus on its core business, because I doubt ClickRiver will yield a river of clicks.
why is it called clickriver ?
To Amanuel:
That sentiment echoes the problem Goto.com had when they paired up complimentary text ads with search results.
A couple years later after that hullabaloo Google’s effectively made it a non-thought to see ads with search results.
The funny thing is the greatest success of AdSense has always been the user’s inability to discern what was an ad and what was content. They’ve built a 3 billion dollar revenue stream on that stupidity and Amazon is not going to walk away not trying to take a stab at that.
With that said how hard would it be to build a PPC system? A9 is in Santa Cruz and they’ve been advertising quite a flurry lately for new job ads. Why would they need to partner with Google when all they want to do is test this exclusively within their own network?
Steve, what Amazon is trying to do is vertically integrate. It is interesting that you pointed out eBay’s partnership with Adsense and Overture; that may make sense now, but overtime I expect eBay to rollout its own ad service…there is a lot of money to be made, and I don’t see why eBay can’t do this themselves. Amazon enterance won’t be bad for the company. The worst that could happen is that it won’t take off…so what? Amazon’s core business will continue on anyway.
Large corporations often expand out too fast (i.e. Google recently accepted this problem). A good example is Amazon itself; it has been rolling out products that have little relevance to its core business of selling books. If Amazon turns into another general purpose auction site, then I will go to eBay to buy books
However, this move to vertically integrate by introducing its own ads will only do the company some good. They can always switch back if it doesn’t.
this is an awful crapola idea, but too far from their core business? are you kidding me? have you seen their other new venture: http://www.nownow.com? i believe that they actually think they’ve got a shot at taking on yahoo or msn….interesting, like ‘hawshack from welcome back kotter taking on mike tyson…entertaining, not though not too wise…
Amazon has been working on leveraging their scale for other services. S3 has been really popular as well as Alexa and while A9 and Mturk weren’t stellar superstars, you can’t fault a company for trying.
No mistake Amazon will profit from this, maybe even see revenue for a long term (2-3) years. But actually serving ads from one independant on another independant buyer’s amazon store that they actually pay $45 a month to have is not fair.
– You are selling out your sellers; who in fact probably make up close to %25 of who you are, to make a gain of probably around 10%. It doesn’t make sense to risk 1/4 of your business model to increase gains by %10
- (of course all numbers are theoritical…) But just to make a point.
- Rbowles
To riff on some of the points Tech Blog brought up, I read some of the details on the clickriver beta, and it looks like these ads are targeted towards service providers and retailers, who are not already selling on Amazon. The beta used the word “complement” i.e. (”Clickriver Ads presents a unique opportunity to advertise services and products that complement the selection on Amazon.com…”) For the interim at least, this program is targeted towards banks, insurance companies, etc.
Tech Blog, though, is correct in thinking that if Amazon Sellers are allowed to use these ads to promote their competitive offerings, it will make a lot of people unhappy. I’ve sold on Amazon, and I can say that the Amazon product detail pages leave a lot to be desired in terms of tagging for search. What ends up happening is that Sellers are successful because they’re the cheapest for a particular product search term.
In addition, Amazon has a tendency to frustrate the people who make them money. Amazon will undercut Sellers with popular products, but that’s a whole entirely different thread.
Very smart move on Amazon’s part, definetly would be part of my advertising strategy if I was running a company.
Good and creative business idea to be the headcount and yet head-to-head competition with all the existing dogs in that industry.
If I had that capability in that field, would do the same thing.
LOL, this is very good.
“Update: Amazon contacted me to clarify that advertised products must be complementary, sold off-site and not in competition with what Amazon is selling.”
Not in competition with Amazon’s own offerings? That doesn’t leave room for much.
sold off-site and not in competition with what Amazon is selling
So the local meth dealer can advertise, well at least for now until Amazon moves in on that market too.
A9 shifted gears from photos of local streets to a google adwords clone? Bwah?
I can’t see how this will work. If an advertiser can’t compete with what Amazon is selling what keywords are they going to buy? A user that looks for Blackberry accessories might also want … clean underwear? (that’s my personal favorite Amazon recommendation). I’m not sure how Amazon’s going to sell off an individual’s buying habits to people that can’t market to them. Just doesn’t make sense.
Amanuel said:
“Amazon’s clickriver will probably end up destroying and replacing its semi-neutral recommendation with a system that we can’t trust.”
Absolutely. This jeopardizes what I believe is Amazon’s core value to consumers: Trusted recommendations based on actual consumer behavior.
Amazon started going down this road in August when they started fiddling with book recommendations. The recommendations are no longer neutral. Amazon is now handicapping cheap books and short-discount books in favor of expensive books with big wholesale discounts. In other words, the book recommendations they’re serving up now aren’t necessarily the best recommendations (the books most commonly bought by people with your same buying history). The tendency now is to recommend the books that are most profitable for Amazon to sell.
Of course there’s nothing illegal about this, and you can argue whether it’s ethical or not. Sure, Amazon has every right to figure out how to maximize its profits. But it’s misleading to customers. Customers are being given false information, pure and simple — when the recommendations are filtered according to profitability.
Having a pay-per-click program on their product pages is just another step in this direction. Sure, they’ll be labeled ads, but that’s not the way customers are going to perceive it. A good percentage of them will assume it’s an endorsement by Amazon.
Let’s see what magic will go with ‘clickrever’.Because already their are lot’s of product in to-day’s market.