Amazon is set to compete with Google in online advertising with the launch of an ad platform that will be based on the shopping habits of consumers similar to Google AdWords.
Amazon has taken note of Google’s ad business ‘AdWords’ which has a turnover of more than $50 billion and hopes to take advantage of the business by creating a similar model. Amazon will place ads in search results and websites based on the keywords of users which will increase the overall business of the company. The new ad platform of Amazon is likely to be named ‘Amazon Sponsored Links’ and will be a major source of revenue for the company.
The e-commerce site has already started to place small ads on several websites, according to the WSJ report. The new platform will also reduce the number of Google advertisements on the Amazon site. The company, which reported $700 million turnover last year expects to generate more than $1 billion from advertisement revenue.
“Amazon could use the data it has about buying behavior to help make these ads much more effective,” said Karsten Weide, market research analyst at IDC.
Amazon has roped in advertising agencies to test the ad platform that is expected to be released by the year-end. The new platform will certainly hit the revenue of Google as the ads will be replaced by Amazon’s sponsored links. This will also prevent Google from collecting the consumer data for delivering ads. Marketing companies might definitely opt for a new platform other than Google and Facebook that currently dominates the online advertisement market. At least, some of the online advertisers are looking for viable new options, at least as additional place for advertising.
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