For the new year, Amazon is testing out a new program where companies such as Maybelline and Folgers can pay to send free samples to Amazon customers. The best way to advertise a product is letting the potential customer try it out in person. Amazon will choose products that they think each customer will like based on their user data. Amazon’s biggest competitors are Facebook and Google, and this new strategy gives Amazon a big advantage.
Display ads are the traditional ad you see every day while using the internet and social media. Amazon has done all of its advertising in the past through display ads, generating $5 billion in ad revenue. Using free samples as a new way to advertise is giving Amazon high hopes of having a higher conversion than their display ads and increasing their revenue.
Some seem to think Amazon’s new advertising strategy is a great idea. Amazon has such a large user base, and many are considered regular customers. Amazon has built a trustworthy relationship with their consumers, so sending samples that these customers have a high chance of liking seems to be a great business strategy. On the other hand, is this tactic invading customer’s privacy? Some think that using customer data to choose products to send is a violation of their privacy. All Amazon users have the choice to receive the samples or not. Amazon is telling their consumers that they, “surprise select customers with samples that we think will be delightful and helpful”.
Display ads have always been used to target potential customers. Amazon, Facebook, and Google have all spent millions of dollars to promote a product with the hopes of making a sale. If Amazon’s new strategy of sending samples works in their favor, they will be ahead of their rivals. Companies have paid Amazon to send their products and using customer data, the products will go to the customers with the highest possibility of buying. This strategy eliminates the cost of promoting a product, saving Amazon a lot of money.