Why Amazon’s home makeover show should make Google and Facebook nervousOn August 3, 2017 by Kenna
Amazon is churning out more content designed to sell you things.
You might not know Pansino and Panosian, and that’s just fine. They have more than 10 million subscribers between their two YouTube channels—and they’re already pros at integrating products into their work.
The new show, called “Overhaul,” is designed to take advantage of that by prominently featuring Amazon products like furniture—a category that Amazon would very much like to start dominating—and various other decor. It will be accompanied by its own storefront within Amazon’s site that will showcase the products that appear in the videos.
Shopping site DwellStudio’s Christiane Lemieux is reportedly signed on to co-produce and host the series.
While Amazon already streams ad-free prestige Prime shows and movies, this is the first to be produced explicitly for the purpose of promoting products.
The show is Amazon’s biggest and most recent effort to master the sort of entertaining and engaging content that doubles as advertising.
Last month, Amazon quietly rolled out an Instagram clone of sorts in its main app. It came pre-stocked with influencers paid by Amazon to post about things … that can of course be bought on Amazon. Prime users can now post their musings about how their noise-cancelling headphones made their plane ride bearable, or how their dog is just loving its new bed (“buy them here!” a hyperlink icon in the corner of each post suggests).
Amazon’s efforts point to the ongoing battle to get people to buy things through a screen, which has been going for as long as there’s been a consumer internet.
“Your margin is my opportunity”
Amazon, which moves around $95 billion worth of stuff every year, is pretty good at this—but that’s not enough for CEO Jeff Bezos.
And that can be a bit worrying to the other two corporate giants that dominate the internet: Facebook and Google. Ultimately, their mission revolves around getting people to buy things too, but they don’t actually sell anything. You might see an ad for, say, a pair of shoes that Facebook’s algorithms thinks you’d like. Then you might go to Google to search for reviews and details about the shoes. Ultimately, you probably go elsewhere to actually buy them and, statistically, around half the time that somewhere is Amazon.
Amazon’s place in that system is great, but they’re gunning for Facebook and Google’s roles, too. The fear is that Amazon will somehow cut out the middlemen. In Google’s case, it’s already starting to do so by selling advertising around the growing number of people who start their product search on its site rather than on Google. As Bezos is fond of saying, “Your margin is my opportunity.”
If Amazon pulls it off, look out. This would be something close to a holy grail of digital capitalism—personalized content that engages and entertains people while simultaneously and seamlessly luring them into buying things online from the same site. It’s the actual moneymaking parts of platforms like Facebook and Google-owned YouTube plus the e-commerce power of Amazon.
Facebook and Google have, in turn, been trying to take a bite out of Amazon, but they can never quite crack the shopping part. Efforts like “buy buttons” on Facebook posts and YouTube videos and Facebook’s branded customer service bots never took off as the companies once imagined they might.
The good news for anyone who doesn’t want to see the web turned into the InterBezos personal fiefdom is that Amazon isn’t much better at the other side of the equation.
For all of its troves of consumer data, the company’s still not great at surfacing products that people want but don’t yet know they want. It’s not a fun place to browse the virtual shelves, so to speak.
The company now seems to want to change that—or it’s at least idly toying with the notion of doing so.
Earlier in the year, it launched a program that actively recruits social media influencers to incorporate Amazon products of their choice into their content in exchange for a commission.
Taken together, none of Amazon’s moves in the content arena yet amount to much more than a set of relatively small trial balloons, but it does seem to indicate that Amazon is entertaining the idea of blazing forth into more social content and native advertising.
It’s not a fun place to browse the virtual shelves …
It also comes as Amazon has been quietly beefing up its advertising operation. Emarketer projects that business will pull in $1.5 billion for the company—a growth of around a third from last year—and $2.4 billion by the year after next. For perspective, the former figure is nearly twice the revenue that the same firm is predicting from all of Snapchat this year.
Advertisers and their agencies are starting to take notice and build marketing strategies around the company. WPP, the world’s biggest ad agency, has even gone so far to set up an entire Seattle operation just to be close to Amazon’s headquarters.
Analysts think that growth should give Facebook and Google pause, and a couple banks have even downgraded their views on Google’s stock in response.
But even Amazon’s projected ad revenue is a relative drop in the bucket compared to the massive duopoly Facebook and Google hold on the market. Amazon’s billion-plus-revenue makes up around 1.5 percent to Google and Facebook’s collective 70 percent.
Amazon’s move into content that sells—however insignificant in scale right now—could push it further into that arena.