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Amazon knows what you buy, and it’s built a $125-billion dollar ad business off it that’s a marketer’s dream

Amazon knows what you buy, and it’s built a $125-billion dollar ad business off it that’s a marketer’s dream
Business
SEATTLE — When a chain of physical therapy centres wanted new patients, it aimed online ads at people near its offices who had bought knee braces recently on Amazon.

When a financial services provider wanted to promote its retirement advisory business, it directed ads to people in their 40s and 50s who had recently ordered a personal finance book from Amazon.

And when a major credit card company wanted new customers, it targeted people who used cards from other banks on the retail site.

The advertisers found those people by using Amazon’s advertising services, which leverage what the company knows better than anyone: consumers’ online buying habits.

“Amazon has a really straightforward database — they know what I buy,” said Daniel Knijnik, co-founder of Quartile Digital, an Amazon-focused ad agency that oversaw the ads for the clinics and retirement services. “For an advertiser, that’s a dream.”

Ads sold by Amazon, once a limited offering at the company, can now be considered a third major pillar of its business, along with e-commerce and cloud computing. Amazon’s advertising business is worth about US$125 billion, more than Nike or IBM, Morgan Stanley estimates. At its core are ads placed on Amazon.com by makers of toilet paper or soap that want to appear near product search results on the site.
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