Amazon’s ad business is growing rapidly. With triple-digit growth reported in the last three straight reporting periods, Amazon’s annual ad revenue is on pace to top $10 billion. The e-commerce giant’s latest ad test goes beyond traditional display, video and product search advertising to delivering product samples directly to customers.
Why you should care
The sponsored sampling program, first reported by Axios Tuesday, taps Amazon’s greatest strengths: its order fulfillment capabilities to facilitate fast and accurate sample delivery; an unparalleled trove of data on what millions of individual customers search for and buy; and a deep practice in machine learning to identify other products or brands those consumers might be willing to try.
It’s not clear exactly when testing began, but the Targeted Product Sampling program is in its early stages and not yet available via Amazon’s self-serve advertising platform, though including it there appears to be the eventual goal.”The technology team builds the core systems to automate and track sampling campaigns — and ultimately enable self-service,” says a job description for an engineering position on the Sampling team.
The Targeted Product Sampling team is part of the Consumables organization at Amazon, according to job descriptions noted by Axios, and it’s tasked with driving product adoption using machine learning. Product sampling, the company’s thinking goes, will garner better conversion rates than display ads. “Free samples of new products are sent to customers selected using ML, thus ensuring a higher likelihood of conversion than display ads,” a job description notes.
While Amazon is calling this an advertising product, sampling program funds aren’t typically pulled from traditional media budgets. We’ll be following up with marketers to hear how they’re thinking about this kind of program as part of their Amazon strategy.
More on the news
This is not Amazon’s first foray into sampling. It introduced Amazon Prime Samples in 2017, allowing vendors to submit ASINs of sample products in Vendor Central for possible inclusion. Prime members can purchase individual product samples and earn credits toward future purchases. Through its Vine program, Amazon sends vendor samples free in exchange for product reviews on the platform. One job posted in November for a “BizTech Leader, Sampling,” says the team is “reinventing how customers discover and try new products on Amazon through various formats of sampling.”
Consumable products advertisers participating in the program supply Amazon with samples. Prime and non-Prime customers are eligible to receive product samples. Customers are automatically opted-in to the program but have the ability to opt out.
Amazon’s list of products that have been sent as samples includes pet food products from Purina and Nutro, grocery products from Kind and Dunkin’ Donuts, beauty products from Dove and Maybelline and household products from Oxy Clean.
Amazon declined to comment.
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