Amazon Boosting Sponsored Products; Hyundai & Amazon Team Up

RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Amazon boosting Sponsored Products; Hyundai & Amazon team up; and Amazon to reach USD$1tn?

Amazon boosting Sponsored Products

In its latest bid to close the gap with Google and Facebook in digital ad sales, Amazon plans to dramatically increase the available space for one of its most important formats, Sponsored Products. It could let brands run them across the internet, not just within its own properties.

Amazon is talking with top agencies and brands about participating in a test that would expand the scope of product ads, delivering them to outside websites by retargeting consumers who visit Amazon, according to ad industry executives familiar with the strategy. They spoke on condition of anonymity because they are not authorised to discuss the details publicly.

Sponsored Products is one of the main ad formats on Amazon’s platform. It lets brands run campaigns pegged to the terms that consumers search for, similar to the search ads that made Google fantastically rich in the open web. Brands target the ads based on keywords that reveal exactly what Amazon users are in the market to buy. They appear sprinkled within search results and individual product listings.

Sponsored Products accounts for the majority of ad revenue, 88%, that Amazon makes from search-based advertising. In the first quarter of this year, Amazon generated more than USD$2bn (£1.5bn) in ad revenue, on pace to surpass even the rosy forecast that it would hit USD$3.7bn (£2.81bn) in ad sales for the whole year.

Hyundai & Amazon team up

Hyundai have offered a virtual showroom on Amazon. You won’t be able to order an Elantra with Alexa just yet, however. The new section only provides details for a variety of automobile models, with links to find local dealers.

Just like other consumer items on Amazon, you can see prices and options for each model of Hyundai, click on different colours to see it applied to photos of the cars and even add a specific auto to your Wishlist. When you’re ready to buy, however, you’ll be taken to the page for that specific model.

“This collaboration with Amazon provides customers with the ability to learn about Hyundai vehicles in a way that matches their expectations for nearly every other type of purchase”, said Tim Maxwell, senior group manager, digital marketing, Hyundai. “Hyundai and its dealers are modernising the car buying process, so it made sense for us to be the first car company with its own digital showroom.”

Amazon to reach USD$1tn?

Amazon is expected to show bigger profits when it reports second-quarter earnings on Thursday, backed by the continued growth of its higher-margin businesses, like cloud, advertising and third-party marketplace.

Wall Street estimates Amazon to post second-quarter profit of USD$2.50 per share, or roughly USD$1.2bn (£900m), up from the 40¢ per share reported a year ago, according to a Thomson Reuters consensus estimate.

That would be nearly a sixfold increase from the year-ago period, and the third consecutive quarter of surpassing USD$1bn (£760m) in profits. Amazon’s quarterly profit topped the USD$1bn threshold for the first time in the fourth quarter of 2017.

In the second quarter, Amazon rolled out Prime member savings in all Whole Foods stores nationwide, while expanding Whole Foods delivery in more cities including Chicago, Houston, and San Antonio.

It also made its first official move into healthcare by acquiring online pharmacy PillPack, and launched new initiatives like a service that delivers packages directly to the trunk of a customer’s car.

Sales from Prime Day, which took place earlier in July, will not be included in the second-quarter results. Investors will look to third-quarter guidance to get a sense of how successful Prime Day was.