Commercial messages everywhere and advertising aren’t new in e-commerce and retail stores. But 2022 was the year when paid persuasion invaded more places consumers shop.
Charging money to influence what people buy helps stores and product manufacturers make more money.
As with many changes in shopping, Amazon is leading the way in paid product persuasion’s bigger role. (Amazon founder Jeff Bezos owns The Washington Post.)
Geoffrey A. Fowler of The Washington Post recently dug into Amazon’s shift away from a site where price and quality largely determined what products shoppers were most likely to see. More and more, Amazon searches turn up listings of companies that pay Amazon extra to show their blenders ahead of those from competitors.
Amazon says that the company’s paid promotions are personalized and help shoppers find products that suit them.
But marketing and shopping experts say that Amazon’s paid product commercials reached a new level of power this year in three ways: Amazon is eating more of the advertising industry. A growing number of companies believe it’s useful for them to spend more on Amazon ads. And more stores are copying Amazon’s approach.
For the first time in years, Google and Meta have grabbed less than half of the digital marketing money spent in the United States in 2022. Amazon, which took more than 11% of all digital ads purchased, was the biggest reason Google and Meta lost ground as advertising powerhouses, according to the research firm Insider Intelligence.
In part because of Amazon’s success with paid product promotions, Walmart, Target, the grocery delivery company Instacart, drugstore chain Walgreens and other retailers are also putting a higher priority on tailoring commercials to influence what people buy, advertising specialists said.
Another reason these ads are spreading is that retailers’ knowledge of what individual consumers buy is valuable, especially now that there are more limitations on how internet powers such as Facebook can follow what people do online to target their specific tastes with ads.
Like Google and Facebook, stores are trying to use as much information as they can find about individual shoppers to steer their choices. One difference from Google and Facebook is that retailers like Amazon and Walmart make money from influencing what people buy and from selling people the product.
The ads seem to work, which is why paid product persuasion is likely here to stay.
CommerceIQ, whose software helps businesses sell products on Amazon and other stores, said that for each dollar product sellers spent on Amazon ads during a holiday shopping stretch around Black Friday, they sold more than $5 worth of products most of those days.
It’s easy to say we hate ads, but consumers may find this type of marketing handy sometimes.
A shopper at a Macy’s store or on Walmart’s website to browse for a new winter coat might want suggestions for which coat to buy, whether those recommendations are from a professional shopper or from paid commercials. Shoppers might also be fine with their supermarket storing information on their purchases in exchange for loyalty discounts.
Those who don’t love their favorite big box store nudging them to buy a brand of toothpaste that pays for their attention don’t have a lot of power. Just being aware of shopping ads is a step. Online, such ads often have small labels that say “Sponsored” or something similar.
Under California’s privacy law, shoppers may be able to demand that retailers delete personal information they have collected about them that are some of the ingredients for paid persuasion ads.
Unfortunately, filling out the requests to delete one’s data can be confusing and time consuming, and may only be available to California residents. And deleting the data from Walmart or Amazon won’t remove ads when consumers shop. Ads will just be less targeted to them.