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Amazon’s online advertising potential

I really wanted this Advertising Age story to deliver the goods: “Amazon Breaks Silence on Ambitions in Advertising…” Unfortunately, it seems that Amazon was its usual close-to-the vest self, even as it promoted its offerings – I hesitate to say “platform” – to an audience of advertisers and agencies. Why should anyone care? Because Amazon has the reach, the data, and the ad inventory to be a really important player in digital marketing, potentially disrupting companies like Google, Facebook, and the portals.

Ad Age says Amazon has “hundreds” of sales people and 92,000 square feet of New York office space. Amazon pumped Kindle, but also talked up its ad inventory on its owned-and-operated content site IMDB as well as its content/retail hybrids Soap.com and Diapers.com, and its own and Zappos retail sites.

In my experience of working with Amazon, it’s a numbers-driven company. So when it makes the decision to sell third-party ads on screen real estate it could be using for Amazon promotions, it knows what it is doing. Those ads are likely effective for advertisers, and profitable for Amazon. Unlike social media and portals that infer purchase intent from content behavior and self-expressed Likes, Amazon has tons of data on actual purchase and search behavior. Its targeting should be top-notch, for both brand-building and actual conversions. With Kindle and apps, Amazon has a mobile story that’s more robust than most content companies or ad networks.

Because Amazon is so secretive – even in its financial documents – it’s difficult to get a read on just how much ad spending it absorbs. But I wouldn’t be at all surprised if Amazon’s ad revenue were bigger than that of a company that gets a lot more attention as a media business: Twitter.