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It’s never been more difficult to sell stuff on Amazon.
Last year, Recode reported how Amazon had, over time, stuffed its search results with advertisements, so in order to show up in customer search results, brands were increasingly having to buy ads.
Since then it’s gotten worse.
Now 11 percent of all product views on Amazon come from sponsored listings, up 3 percentage points in just the past year, according to new data from digital research firm Jumpshot. It’s not clear if that’s because there are more sponsored ads or because sponsored ads have gotten more effective. Going to a product’s page also doesn’t necessarily mean customers will end up buying that product, but brands are nonetheless forking over money to attract these customers’ eyeballs.
Showing up higher in search results greatly affects whether people will click on and buy products. This has repercussions for both small third-party marketplace sellers that base their whole livelihoods around selling on Amazon, as well as giant brands like Samsonite, Dove, and Levi’s. Amazon didn’t immediately respond to a request for comment.
As Recode’s Jason Del Rey explored in his Land of the Giants podcast about the rise of Amazon, companies that sell on Amazon are increasingly having to pay to show up in search results — even when people are searching for their specific brands.
Case in point: the luggage brand Samsonite, which has to pay for sponsored ads in order to be the top result when you search “Samsonite” on Amazon.
As Samsonite’s Chief E-commerce Officer Charlie Cole told Del Rey, “Amazon is making money off your products, making money off your data by creating brands, and Amazon is making money off the privilege of being on their platform by selling you advertising to protect your brand.”
“It’s been a tough relationship,” he added.
Even sponsored ads aren’t a sure bet. Amazon has also changed its search algorithms to privilege its own Amazon-brand products, according to a new report from the Wall Street Journal.
That means brands not only have to buy ads to place prominently in search results on the e-commerce giant’s site, but they also must compete against Amazon’s own brands — and Amazon has extensive data on what and at what price people purchase goods online.
Amazon lawyer Nate Sutton previously testified before Congress that, “We do not use any of that specific seller data in creating our own private brand products” — which notably left out whether Amazon was using general data.
All of this comes as both state and federal government regulators are ramping up their plans to probe Amazon for potentially engaging in anticompetitive practices.
As far as sponsored content, Amazon is becoming less friendly to other companies, not more.
