Social Commerce, the Amazon way

First, it was Pinterest, then Meta (Facebook and Instagram), and most recently, it was Snap. Amazon has partnered with social networks to offer them an advertising solutions that showcase Amazon listings inside the social network which customers can purchase without leaving the social network.

With the arrival of TikTok and the launch of TikTok Shop, Amazon would be sitting outside the social shopping boom, and Pinterest, Facebook, Instagram, and Snap would also lose. Amazon has access to an infinite inventory of products that can be delivered to any advertising network through its demand-side platform (DSP).

Technology companies are currently all looking for margins and profits and social media companies are dependent on advertising to grow revenues. To be clear, Pinterest, Facebook, Instagram, and Snap have all tried to bring commerce to their platforms with little to no success. Allowing Amazon advertising on their platform essentially ensures revenues without investment into building new technology; yes, technology needs to be implemented by teams at these social networks, but these platforms can generate revenues from commerce without losing the customer to another screen/app. Sounds familiar, right? Hello TikTok.

It is becoming increasingly clear that Amazon wants to be the commerce infrastructure for the web, ensuring that brands can leverage their advertising and logistics solutions to drive revenues for Amazon or their partners. According to The Information, Amazon did offer TikTok parent company Bytedance the opportunity to partner with them to enable commerce via third-party ads to stay inside TikTok. Fox meets hen house.

Since April 2023, Amazon has created the largest shopping advertising network that enables brands to meet new customers via advertising all over the web via partnerships with social media networks and publishers. Sounds familiar, right? Hello, Adsense for commerce at a mega scale.

Amazon also has made the much-hyped retail media network irrelevant, as no other retailer will have access to the digital real estate that Amazon has built since April 2023. Walmart, what is your move here?

Frame it in another manner This is an evolution of Amazon’s much-loved affiliate program, Associates at a scale not seen elsewhere.

Calling it now - Q2 2024 Snap will announce significant new revenues from advertising in its quarterly earnings. It’s unlikely that Meta will announce any results publicly as it devalues their own advertising solutions.

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This is interesting. You are making the right points.

Here are a few of my own.

1 - While Amazon has a great network of advertising partners, it still does not have as much reach as Google.

2 - Amazon has some of the best converting ads on the planet.

3 - To continue to take advertising marketshare, it needs more traffic. outside of Amazon properties.

This makes all the sense in the world to me.

Meta and Snap are not good at eCommerce. If Meta could monetize the space better on their own, they would.


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