Now, the "sleeping giant" seems to start waking up slowly.

Absrtact: The following is the full text of the article: The Sleeping Giant in the advertising industry, Amazon has a resounding nickname sleeping giants. The name is due to the huge amount of shopping data gathered by the world's largest internet retailer, in the eyes of many marketers

The following is the full text of the article:

Sleeping advertising Giants

In the advertising industry, Amazon has a resounding nickname-"The Sleeping Giant". The reason for this is that the vast amount of shopping data gathered by the world's largest Internet retailer has incalculable potential in the eyes of many marketers.

Now, the "sleeping giant" seems to slowly begin to awaken. After years of advertising on its website, Amazon began to take the first step toward a real internet advertising network: Using the company's vast database to deliver accurate ads to the world's largest advertisers on thousands of third-party websites.

Amazon's mobile ad network, launched late last year, is now prairie to launch a variety of ads via smartphones and tablet apps, including Apple's iphone and devices that carry Google's Android operating system.

For Amazon, the advertising business will be far more profitable than the retail business. For Google, Facebook and other online advertising leaders, Amazon is a threat that cannot be ignored because it has the data that these companies lack.

Google knows what people are searching for, Facebook knows what people like, and who knows who their friends are. Amazon knows that you searched your running shoes last week and that you bought a pair a year ago, and this information is more coveted by advertisers.

"In today's marketing world, the data is gold, and Amazon is Fort Knox (Fort Knox, the Federal Reserve's vault)." "said Jeff Lanctot, chief media officer of digital advertising agency Razorfish." Jeff Lankdort. Razorfish provides services for Mercedes-Benz, Danone Airlines and McDonald's customers.

Lankdort has worked with Amazon for more than 10 years, saying the company's approach to advertising was "dispensable".

"But now they clearly decide to invest in this area." "They have deployed a series of projects to understand the needs of advertisers-what data you need, what size of data you crave." ”

Broad profit Prospects

Amazon is moving into a highly competitive area. Google, Yahoo, Microsoft, Facebook and AOL have scored two-thirds of the U.S. online advertising market, according to emarketer, the US market research firm.

But the industry believes that Amazon's sales figures have brought a unique advantage, despite the unusually fierce competition, but the broad prospects for profitability is still worth the effort.

Ben Schachter, an analyst with Macquarie Securities at the US investment bank, said the profit margins for online advertising were 20% to 30%, while Amazon's retail business was less than 5% per cent Ben Schacht.

By the time Amazon releases its Thursday results, analysts will be watching closely for signs of growth in its high-margin business, including advertising and cloud computing services. For years, the company has been expanding the size of these sectors at the expense of short-term profits.

Amazon did not disclose the performance of its advertising business, and its spokeswoman declined to comment.

But analysts estimate that the company's advertising business has reached at least 500 million dollars in annual revenue. David Sai, a former Amazon executive who currently operates RichRelevance, a personalized E-commerce company, has recently predicted that Amazon's advertising business will reach $1 billion trillion this year.

This still seems insignificant compared with the estimated total revenue of $75 billion trillion this year. But in the long run, Amazon's advertising business could be very impressive if it could capture more of the US digital-advertising market. According to emarketer estimates, the United States digital advertising market size to 2015 will reach 50 billion U.S. dollars.

"Will it be against Yahoo, Facebook or AOL's advertising business?" Schacht said, "definitely." ”

Third-party website advertising

The display ads on Amazon's own websites have been growing at a high rate since 2011, but the real attraction for Madison Avenue and Wall Street is using Amazon's data to advertise on other sites.

"Third-party advertising networks contain huge opportunities. "There are few sites like Amazon, but if you break that limit, you can make the most of millions of third-party websites," says Schacht. ”

Amazon started sneaking ads into third-party websites as early as the fourth quarter of 2010. But the business has not been disclosed until the company officially named Amazon advertising platform last year.

Official news shows that the "Amazon advertising platform" is currently in the United States, Brazil, Germany, thousands of sites in advertising. Amazon spokeswoman declined to disclose the identity of the site with which it cooperated. However, the spokesman said that Amazon will directly to the content publishers to buy ads, may also be through the online advertising market to buy ads.

Amazon uses self-developed technology to put ads on third-party websites in real time. Some of the promotional activities they have deployed for the curiosity of diapers and game developers are posted on third party websites.

Shopping Data Advantages

This is Amazon's advantage: Over the past 15 years, it has tracked the browsing, search and purchase records of thousands of online shoppers on Amazon, and can use this information to recommend products to users. Now, it is starting to use the data to improve the efficiency of advertising, and then the ads on the right site, the right time to show the right consumers.

A large entertainment company last year worked with Amazon to promote a film, a person familiar with the situation said. Amazon's data on DVDs, books and music can help it find consumers who might be willing to watch the movie in theaters, and then send them accurate ads. According to data such as display volume and clicks, this kind of advertisement has better effect than ordinary advertisement, the person said.

"Amazon spends a lot of time developing algorithms to recommend products to consumers on the site," he said. "said one of the ad market executives working with Amazon.

He added: "Now they can serve other companies outside the Amazon." This is indeed an extension of their core competencies. ”

With a wealth of consumer information, Amazon could be more aggressive in bidding for ads because the company has enough confidence to get a higher click rate. People familiar with the matter and analysts said Amazon's advertising fees are also higher, because its advertising can achieve better orientation.

"Amazon is no longer a retailer, it is the world's largest behavioral marketing company." "Amazon can best predict whether an ad bit is worth buying and has the highest efficiency," said Yaakov Kimelfeld, chief research officer at Kantar Media compete, a market research firm. ”

Mark Pavia, an advertising agency Starcom USA Executive Mark Pavia, believes Amazon's shopping data can help advertisers improve their advertising efficiency because they will only post ads if they identify the audience most likely to respond to the ads.

"I can use 100% of my money." With the shopping data, you can just post ads to my target audience. "They have a very attractive level of orientation," Pavia said. ”