What's Driving Amazon's Ad Business?

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Dec. 10 (Bloomberg) -- Amazon Media Group Vice President of Advertising Sales Lisa Utzschneider discusses Amazon's advertising strategy with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Guest, there is a new normal.

Vice president of global advertising sales.

You spoke at a conference a few months back and i was just blown away by this.

I did some research.

You don't give numbers out.

I figure it was a standalone company, probably fourth or fifth largest u.s. advertising agency.

What is the goal?

Sure.

Thanks for having me.

At amazon media group, that is our advertising business, we focus on customers.

We start with the customer and work backwards.

We focus on delivering -- who is the customer?

The consumer, the shopper.

We deliver relevant advertising experiences for customers that we can help them find, discover, and by what they are looking for.

We are a global platform and we have over 200 million active customer accounts around the world.

That is the amazon shopping experience most people know.

When the ads show up through your network, they really drive sales in a direct way that i don't think we have seen a lot of in recent history of e-commer ce.

Right.

A core area we are focused on is e-commerce ads.

We take amazon's shopping features and functionalities that many of our customers love, things like digital coupons, customer ratings and reviews, buy now functionality, and we embed that in the ad.

We are seeing great results.

On average, they are performing about 20%, 30% better than standard ads.

I am thinking back to my magazine days.

Direct marketing, really successful, will 1.5%, two percent.

What are standard returns for a good ad in this world?

There performing up to 30% better.

The other thing we are seeing is multi-screen really matters.

I am sure as you know and as i shop, i spent more and more time on my mobile phone, on my tablet, on amazon.

The kindle fire, to be sure.

What we are seeing as our advertising that his running cross-screen is performing 18% better.

It is the combination of creating a call to action in advertising experiences.

We see some ads here.

Customer reviews.

You see the stars, whatever they are.

What is the effect of an ad with the customer reviews and without them?

You can compare those things.

Right.

We are seeing 20%-30% better on average.

Customer ratings or reviews, even pricing, including the price in the ad, we are seeing 50% better.

That is both an clique-through and purchase intent with that price embedded.

It is making a more relevant experience for the customer in helping our customers find the product.

50% increase.

That is amazing.

What about the one-click?

Copyrighted, trademarked, patented, amazon innovation.

One-click.

Better return, better roi.

The beauty of putting buy-now functionality or digital coupons is it helps the customer moves seamlessly in their shopping experience across device.

We are seeing better results.

Can you quantify that one as well?

The buy-it now?

The number i will share with you is 20%-30%. do you imagine -- what kind of pickup have you seen?

This focus is a certain kind of advertising.

It is a vast world of brand advertising and it is really not what you are talking about.

We are seeing interest from our advertisers.

We put them into two categories.

One is an demagogue or ties are's, those that are promoting products that customers can also buy on amazon.

The second quarter very -- category is non-endemic.

They are connecting with amazon customers through a branded experience.

A great platform for that today is kindle and kindle fire.

It is in color.

Advertisers can embed video and we are seeing great results.

I got my daughter a candle -- kindle and she has become this voracious reader.

She plows through books.

I got the one that doesn't have ads on it and it is interesting.

I see different kinds of ads.

I can't comment on the kindle sales, but customers are really loving the advertising experience on the kindle fire because we're so focused on ensuring it is a great customer experience.

High brands bar and it is relevant.

High brand bar is that, i am a big believer in i want to sell + am proud of and that our team is proud of.

Brands that are relevant for customers when they are in that shopping mode or when they are in that reading mode.

Does that mean you have information about which customers will see that add even on the kindle?

Not on the kindle.

Targeting is based on audience segments.

We put them into two buckets, one being lifestyle, sort of the bigger, fashionista moms, gadget geeks, and it is gathered down in market when an audience is closer to purchase.

How many of those groups -- i come from a world where it was really about demographics.

Marketing is at a different level now.

We have hundreds and hundreds of segments.

Interesting.

Where does this business go from your?

-- here?

To be clear, you are on sites not just on amazon.

You are bringing that experience to other places.

On or owned and operated sites, amazon, imdb.com, to share a few examples.

We are able to connect with amazon customers out across the web.

The other area we are able to connect with amazon customers with connected devices.

Amazon shopping app on your mobile phone, imdb, also kendall -- kindle.

We are starting to test video.

Amazon customers love watching how-to videos about products and because customers are so enthusiastic about video and watching video, we are starting to test and learn from an advertising perspective what could be relevant.

Such a trip.

It is where we have seen tpm's

This text has been automatically generated. It may not be 100% accurate.

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