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Amazon is piling ads into search results, and top consumer brands pay for prominent placement

Amazon is piling ads into search results, and top consumer brands pay for prominent placement

September 21, 2021: -Search for “toothpaste” on Amazon, and the top of the web page will show you a mix of popular brands like Colgate, Crest, and Sensodyne. Try a different search for “deodorant,” and you’ll first see Secret, Dove, and Native products.

Look closer, though, and you’ll notice that those listings are advertisements with the “sponsored” label affixed to them. Amazon generates hefty revenue from the top consumer brands due to getting valuable placement on the biggest e-commerce site is with a rising price tag.

“There are less organic search results on the page, so that increasingly means the only way to get on the page is to purchase your way on there,” said Jason Goldberg, chief commerce strategy officer at advertising firm Publicis.

For consumers who look for toothpaste on Amazon, getting unpaid results requires two full swipes up on the mobile app.

Until recently, Amazon put two or three sponsored products at the top of search results. Now, as many as six sponsored products may appear ahead of any organic results, with the promotions elsewhere on the page, said Juozas Kaziukenas, who runs e-commerce research firm, Marketplace Pulse.

The number of ads that appear differs that it depends on the exact search term, and other factors look if users are shopping on a desktop, mobile, or in the Amazon app, Amazon says.

While Amazon doesn’t break out advertising revenue, ads account for most of the company’s “other” sales. That category was the fastest-growing part of Amazon’s business in the second quarter, with revenue that soars 87% from a year earlier to over $7.9 billion.

In 2018, Amazon leapfrogged Microsoft, which became the third-largest ad platform in the U.S., trailing Google and Facebook. Amazon capitalizes on its market control, knowing that its website or app is where many consumers are starting their online shopping journey.

Kaziukenas said Amazon and founder Jeff Bezos have completely transformed from being anti-advertising. Due to such a lucrative business, ads “have replaced the functionality on the site,” he said.

An Amazon spokesperson said that there are no dedicated ad slots within search results, which means that a user may see one ad, multiple ads, or none at all. The company also said advertising is an optional service for brands and sellers but that using it can improve the visibility of their products.

“Like all retailers, we design our store to help customers easily find and discover the brands and products, and sponsored ads are one of the many ways we do this,” the spokesperson said in an email. “In all cases, we work back from the useful customer experience, and the relevance of the results surfaced, regardless of the  presented to the shopper.”

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