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Measuring Amazon, eBay’s Media, Market Placements

AmazonEbayArtAlthough Amazon and eBay are retail marketplace giants, the companies supply data and sell media placements in very different ways. These differences, reflected in their respective digital go-to-market strategies, trace back to each company’s origin. EBay’s roots in auction-based, consumer-to-consumer (C2C) business give marketers and advertisers a much different value proposition than Amazon’s original B2C play.

The Data Difference

Both Amazon and eBay have programmatic offerings in their ad sales businesses. EBay has its buy-side eBay Audience Platform whereas Amazon has a demand-side offering, Amazon Advertising Platform. But the two companies supply different levels of intent data.

For instance, eBay is more flexible than Amazon about opening its own data for audience targeting purposes and for making it available in standalone data sets.

“EBay is very transparent about buying data or standardized ad units with targeting while Amazon is more about buying the ‘consumer’ and letting them dictate where that inventory is actually being bought at,” said Jim Barkow, GM of media at ecommerce and media network Bazaarvoice. (Bazaarvoice competes with eBay and Amazon.)

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Liftopia Gets Skiers To Bounce Off Moguls, Not Its Website

liftopiaSome people dread winter. Others revel in it, and it’s to these powderhounds that Liftopia caters.

Using Liftopia, skiers (and snowboarders) can reserve significantly discounted lift tickets for specific resorts on specific dates. The company wears many hats. Its prime function is as an ecommerce site, yet because it offers lift tickets to ski resorts across North America, it also gets visitors looking for information about the terrain (black diamond-blue square-green circle ratio, for instance), snow conditions and resort amenities like where to spa and party.

And depending on where visitors come from – email, organic search, direct entry or through a display ad – Liftopia needs to serve up the right information immediately, or risk losing a potential sale.

“We’ve always prided ourselves on being a data-driven organization,” said Ron Schneidermann, the company’s CMO and co-founder. He recalled the company’s founding in 2005, when it had a $2,000 marketing budget for the entire season.  “We couldn’t afford to misspend any dollars,” he said. “[Today], with all the marketing we do, we’ve always gravitated toward direct-response channels that we can measure and quantify in as close to real time as possible.”

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Ads Across Amazon: O&O Sites Vary In RTB And Data Readiness

AmazonEcosystemAlthough Amazon has kept fairly quiet about its ad-services pitch to media buyers, analysts believe that marketing services will be a driving force in what sustains and propels the ecommerce giant in the years to come.

“Amazon has to push into new areas,” writes David Farnoush, a media analyst for Harmelin Media, in a blog post. “The retail environment it once dominated has changed. Every other retailer has finally … showed up to the game and [begun to utilize Amazon] learned tactics like price-matching and increasing online selection/availability.”

One of Amazon’s focuses is its burgeoning ad services business, which has grown significantly in recent years. In the company’s Q3 earnings update, digital ad revenues (Amazon groups ad dollars into an “Other” category, which also consists of Amazon Web Services and co-branded credit cards) hit the $960 million mark, more than double the $420 million figure recorded for the same period two years ago, indicating positive momentum.

It remains unclear, however, which Amazon ad units are most lucrative. David Selinger, cofounder and CEO of omnichannel retail personalization engine RichRelevance and former Amazon engineer, said in a recent interview that if he were to guess, “I’d say a quarter of [ad revenue] might come from audience programmatic data arbitrage. Probably two-thirds, or a little more than half, would come from traditional media sales across Amazon properties and then the final quarter or so would come from their new and emerging ad units,” such as new rich-media ecommerce ad formats enabling customers to purchase right in-ad.

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Q3 Ecommerce Spend Softens, But Mobile Commerce Could Hit $10B In Q4

EcommArtEcommerce spending in the US grew 13% year-over-year in the third quarter to $47.5 billion, a softening from Q2 when the growth rate hit 15%, according to comScore’s State of the US Online Retail Economy report.

“There was a bit of a dip in consumer sentiment,” commented Andrew Lipsman, VP of industry analysis at comScore. “The bottom hasn’t fallen out or anything too bad, but there’s a lot of exogenous forces that maybe are making people feel a little less positive about spending.”

Rewinding to 2008 and 2009, there was a lot of softness as growth rates dipped into the negatives or flatlined at zero percent. In the past few years, the growth rate picked back up and reached the mid-teens.

“This year has been kind of an interesting year in ecommerce,” Lipsman said. “I’ve probably never seen a year with such mixed trends where there are some really positive indicators and then some things that are also a bit concerning.”

Seasonality plays a powerful part, as well, with fluxing growth rates in the summer due to uplifts in the housing and auto industries. Consumers may shell out more cash on higher ticket items, which has a negative impact on discretionary items and subsequently compresses spending thereafter.

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Google Gains Retail Velocity

GoogleArtGoogle's product listing ads (PLAs) have positioned it for a strong holiday season, possibly at the expense of Amazon.

Based on data compiled in the third quarter, search and digital marketing agency RKG found that among 500 online retail clients, Google search spending increased 18% year over year. In Q3 alone, Google PLAs drove 35% of nonbrand search clicks.

Similarly, Mercent has seen a marked uptick in adoption and ROI on media spend for these ad units. Mercent syndicates ads, product detail pages, real-time pricing and inventory data for 550 retail brands across Google, Amazon, eBay, Pinterest and major retargeters ranging from TellApart to MediaForge.

A bit of history: In June 2012, Google shifted its free product listings to a pay-for-performance model. Product listing ads, defined by Google as search ads that include richer product information like images, price and merchant, are charged on a cost-per-click or conversion-based CPA percentage basis.

“Pre-June 2012, Google was pretty volatile, but tended to average out at around a 35-40% year-over-year growth range,” said Eric Best, CEO of Mercent. “Not surprisingly, we saw a severe drop-off in gross merchandise value coming from Google after they switched to the paid model.”

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Holiday 2013: ‘Delivery’ Becomes Data-Driven Differentiator For eBay And Amazon

DeliveryArtMethod of delivery is apparently the new black in retail marketers’ holiday ’13 arsenal. And, it’s on the minds of the commerce masses.

This week, after stumbling back from a Q3 earnings call that painted a somewhat stormy picture of its holiday ecommerce expectations (“deceleration” was the word used), eBay made a move to acquire UK-based online delivery startup Shutl to fuel its aggressive eBay Now expansion plans.

In an interview prior to the eBay buy, John Kelly, Shutl’s EVP of retail, formerly a VP of sales for both TellApart and Criteo, told AdExchanger that “same-day delivery and predefined delivery windows is where this industry is going. Amazon’s made an investment. eBay and Google have made investments. The question is not whether this will occur, it’s when.”

In Q3, free shipping was applied in more than 50% of eBay's US transactions. The notion of “same-day,” or even, “in less than a few hours,” delivery, as is the case with the eBay Now service, was also an object of fervor on Amazon’s Q3 earnings call yesterday.

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Amazon Q3: Advertising Business Is Quiet But Burgeoning

AmazonQ3

Amazon fielded two inquiries from analysts about advertising services on today's Q3 earnings call, but CFO Tom Szkutak wasn't biting.

Brian Pitz, managing director at Jefferies & Co., asked Szkutak about domestic ecommerce trends, as well as the growth of Amazon Web Services and Advertising Services. (The company reports the groups together in an "other" supplemental revenue category. The category also includes co-branded credit cards.)

Szkutak said, "The largest and fastest growing area by far is AWS and that’s certainly reflected in that line item." But he stopped there.

"Other" showed strong growth year-over-year, specifically a 58% increase from the $608 million recorded in Q3 of last year to $960 million this quarter. In Q2, that number was $844 million and, in Q1, $750 million. eMarketer numbers have pinned Amazon's annual ad revenues at $840 million for 2013.

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Amazon’s Mobile Media Push Aims Squarely At App Developers

AmazonMobileIn August, Amazon opened its longstanding Amazon Associates Web affiliate program to mobile developers looking to monetize in-app purchases.

Using the Amazon Mobile Associates API, game and app developers could earn up to 6% in advertising fees on all Amazon product purchases they helped facilitate. And Amazon Appstore Developer Select launched in early October for mobile app developers looking to increase discoverability in the Amazon Appstore through premium placement.

Developers also were given 500,000 Amazon Mobile Ad Network impressions and inclusion in the Amazon Appstore Coins Reward program – all ways Amazon could incent and increase in-app engagement.

“If you look at Kindles, Androids, iPhones, iPads – those devices rise and fall based on the apps they have on the platform,” said Tim Ogilvie, co-founder of Think Gaming, a platform that applies demand-side platform-like decisioning to help mobile game developers monetize applications. “The question is, ‘What do you do if you’re Amazon and you want your devices to be successful?’ They’re providing a set of tools to basically incent developers to develop on their platform and use their SDKs.”

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Refinery29 Banks $20M To Build Content-Infused Universes For Brands

refinery29-guysRefinery29 has raised $20 million in Series C funding from Stripes Group to expand its category coverage and technological clout. The round brings its financing total to $30.4 million.

What began as a grassroots fashion discovery portal for emerging brands and designers in New York, the city where high school friends Philippe von Borries and Justin Stefano launched their company, now counts H&M and Samsung as clients and has grown a team of 120 creative editors and engineers.

Von Borries and Stefano want Refinery29 to become a source of content and inspiration for Millennial women while simultaneously generating unique brand experiences for marketers to connect with its audience of 30 million unique visitors per year.

The co-CEOs sat down with AdExchanger to discuss growth and their platform.

AdExchanger: How have you evolved?

PHILIPPE VON BORRIES: There’s been this amazing evolution from our origin as a tiny-dot-on-the-map company [in 2005] that we started by scrabbling a few thousand dollars together. Today, we’re very much a vibrant media company. We attract 10-12 million millennial women online [per month] through content and that’s an audience that’s tough to reach across multiple devices. They’re elusive. They’re on desktop, mobile and other devices. They don’t necessarily go to a URL. As a media company, you have to craft your message and experience to cater to a million different places where that consumer might ultimately exist.

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Alibaba's $206M Stake In ShopRunner Will Help It Challenge Amazon

AlibabaArtAlibaba Group, the Chinese equivalent of Amazon, has invested $206 million in ShopRunner, a member-only subscription ecommerce platform connecting consumers to hundreds of retail brands (like Toys R Us and Tommy Hilfiger) and a plethora of perks -- like free, two-day shipping and express checkout for $79 a year or $8.95 a month.

Alibaba, in which Yahoo has staked a 24% claim (ShopRunner hired former Yahoo CEO Scott Thompson to helm the company in 2012) was founded in 1999 and now commands about 79% of Chinese ecommerce market share through a number of Alibaba-operated platforms like Taobao Marketplace and Tmall.com, according to recent stats from a China Consumer and Ecommerce report published by J.P. Morgan Asia Pacific Equity Research.

Alibaba’s latest stateside investment in ShopRunner, founded in 2010 on the outskirts of Philadelphia, Penn., brings the Chinese powerhouse more US market traction as the company flirts with an IPO in 2014, according to Bloomberg. The company did not confirm a timetable or location for public filing. The company has been valued by analysts at $55 billion, according to the New York Times.

Although ShopRunner appears to have taken a page from the playbook of Amazon Prime and the manic mobile eBay Now express (hours or less) delivery service, the investment marks a serious global next-step for a company that is already breaking the mold in the Asia-Pacific region.

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