Why it could make sense for Amazon to send users away with ads

Read/writeweb has an interesting observation. Apparently Amazon has started to place ads on their site that lead to products in shops on completely different sites. Some ads are contextual, others are not. And Alex asks, why on earth Amazon would do something like that, i.e. sending people out of their shop to go somewhere else?

Here are a few thoughts why it might make sense:

  1. People might remember that they found what they were looking for when visiting the amazon site. Sort of like Google whose tools are all more or less designed to send people away. AFTER they found what they were looking for.
  2. Amazon should know the parts of the site where they are loosing the most users anyway, simply because of natural drop out rates that always occur on sites. This way, they can at least earn some money with people who would never have purchased anything in the first place, too. Question is: would they also integrate the banners on pages with well-selling products?
  3. Learning about the click behaviour for products that amazon doesn’t list, is really clever (and paid for) market research into the gaps of their product offering.
  4. Who says, that margins of products sold are always better than advertising revenue. Most of the web 2.0 sites base their business model on advertising revenue rather than actual products. Amazon can probably offer a good, if not the best, targeting based on their recommendation engine. Does anyone know what they charge per click or per CPM? I bet it’s dearer than most sites you can put your ads on. (And it should well be worth the money!)

These are just four thoughts that immediately came into my mind, why it could possibly make sense for amazon to start placing ads on their site. Any other ideas, anyone?

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