Amazon has launched a trial of a new program called Product Ads. The program allows retailers to purchase ad space on Amazon without selling their products on the site. When a user clicks on the ad rather than being taken to a product within Amazon, the customer will instead be sent to the companies 3rd party site to make a purchase.Product Ads will show a 3rd party competitor, along with the price they're offering an item at right on the same page as the Amazon item. Reminiscent of PriceGrabber, different sites and their price for a particular item are listed below the item and description on Amazon. Users can see all the prices at the same time and make a decision whether to continue with their purchase on Amazon, or click over to the 3rd party website to make a purchase.
Much like other advertising programs advertisers only pay for their ad when a user clicks on an ad and is taken to the advertisers site. Both Google Product Search and Shopping.com run similar programs, but neither is the selling powerhouse that Amazon is. By combining advertising along with their extensive product catalog Amazon is setting themselves up to be even more of a leader in the online shopping arena.
The new program also forces Amazon to stay extremely competitive in its pricing in order to make users want to purchase items from them, however it also gives them the ability to make money off users who do choose to shop somewhere else. It will be interesting to see if the program survives. No doubt the program is great for shoppers, but how do you think Amazon will do with Product Ads? Do you think it will make it through the trial?
[via VentureBeat]
Reader Comments (Page 1 of 1)
2-08-2008 @ 4:29PM
Wiserun said...
I already hate that I have to wade through pages of search results to find stuff that's sold by Amazon.com. This is even worse. If I wanted to shop elsewhere, I'd use Froogle or one of the other product search sites. I go to Amazon to buy stuff from Amazon, not be referred to someone else that might have a crappier return policy and higher shipping charges (I have a Prime account with Amazon).
Reply
2-09-2008 @ 3:26AM
ignar said...
Hasn't buy.com been doing this for a long time? I think potentially this ads business can be more profitable than direct sales for Amazon. People visit to Amazon not just for purchase, but to collect information and read reviews. Amazon can charge fairly high price for ads on those product pages.
Reply