Google has been dominating the online ad segment for quite some time now. That may all change now that many other established companies are launching their own ad exchanges. Facebook launched its Real Time Bidding exchange some months back and this new development has been predicted to make quite a bit of advertising revenue for the social network. Now according to a report in Adweek, Amazon may be jumping in the fray.
Amazon’s self serve ad exchange will be similar to Facebook and will focus mainly on retargeting consumers. Retargeting is the practise of studying a user’s purchase intent based on search strings and then dropping a tracking cookie on their computer. When the user then goes to an ad affiliate or partner site, the cookie is then detected and the website shows the user ads related to the search string. I am not a big believer in the method of retargeting in terms of its ad sales, but many ad exchanges are focusing on this segment. Amazon’s ad exchange has been rumored to be in development for quite a while and may see a early 2013 release.
The thing that works in Amazon’s advantage is that it is the world’s biggest e-commerce company and by that virtue they have a tonnes of data on customers and their buying habits. Advertisers could just plug in to the exchange and leverage it to make users shop for products. Facebook has a lot of personal information about its users and it does not actually supply much in the way of purchase intent. Amazon does that easily. Google has the best purchase intent data but it is not an e-commerce company. The advantage of being an e-commerce company is that you have confirmed data on purchases, intents and buying behavior. Thus we could see Amazon’s exchange eating into the online advertising pie.
Closer home, this looks like an excellent way for homegrown e-commerce brands to build revenue. Companies like Flipkart, Myntra, Infibeam etc. are sufficiently large and must have aggregated quite a bit of data on purchase intents and habits. What if these e-commerce companies were to start their own exchange platform. This would make Indian advertisers and marketers want to tap it for sure. However, I think it won’t happen soon since there is still quite a bit of growth to be achieved by Indian e-commerce companies before this kind of solution is deployed.
What are your thoughts about Ad exchanges promoted by Indian e-commerce companies? Would it work? Let us know in the comments.