Amazon Ads Might Beat Facebook To The Punch

Amazon Ads Might Beat Facebook To The Punch

Facebook Inc (NASDAQ:FB) is at the top of most lists when discussing new entrants into the online advertising market, but there is another company out there with a rich data set that could beat Facebook into the market. Inc. (NASDAQ:AMZN) is getting into the online advertising market, and its service may be better than those of its competitors.

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When talking about Facebook Inc (NASDAQ:FB) advertising, most analysts point to the rich data that the company controls as a key indicator for its potential. Facebook is able to record personal preferences for products and brands, but Inc. (NASDAQ:AMZN) has a direct look into the actual buying habits of users.

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Amazon media group growth

A new report from Citigroup Inc. (NYSE:C) on the online retailer takes a look at the Amazon Media Group. The business segment is involved in the intersection between advertising and e-commerce, and it may, according to this report, have real potential in the months and years ahead. Inc. (NASDAQ:AMZN) is offering Amazon advertisements that include some of the familiar features of the Amazon retail empire. These include pricing and the well established product rating system the company is known for.

Video advertising, another much talked about potential arm of Facebook’s advertising offerings, is already being studied at Inc. (NASDAQ:AMZN). Amazon has Showcase ads as a pilot program. These are video ads that highlight a single product. The company just announced it will be incorporating Video Ads into its search results.

The click through on advertisements that include elements of the Inc. (NASDAQ:AMZN) retail site was up to 20% higher than click through on ads without the offerings. Consumers trust Amazon with their shopping, right down to the reviews other users write about products.

Amazon’s ability to advertise to customers already looking to shop could be a powerful part of its business in the years to come, and the company may be able to compete with companies like Google and Facebook Inc (NASDAQ:FB) for ad dollars if the program continues its success. Inc. (NASDAQ:AMZN) has a lot of brand capital to spend and advertising may be the most effective way to do so.

Amazon performance

Mark May, the analyst who wrote this report, put a price target of $340 on Inc. (NASDAQ:AMZN) stock and rated the company a Buy in this report. In other Amazon news today, the company announced new additions to its Kindle line of Android tablets. The Kindle HDX models have specs comparable to Google Nexus tablets and will be available before Christmas. Inc. (NASDAQ:AMZN) is looking to become the force in retail in the United States in the coming years. The company has begun work on Amazon Fresh, a service that will see customers order groceries online, among other projects. The company’s ambition and its ability to get things done have led to a 25% increase in share price so far in 2013.

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