Bloomberg: Amazon Has a Plan to Become Profitable. It’s Called Advertising
“Future advertising products could include buying products within Amazon Video programs, using the ‘X-ray’ feature that currently lets viewers learn more about a particular actor during a show, according to two people familiar with the matter. And while Amazon maintains it won’t sell advertising on its voice-activated Alexa platform, advertisers are inquiring given the buzz around its Echo digital assistants, two people said.
Big packaged goods companies are signing on. Executives see Amazon as the future way to reach shoppers and are shifting spending from traditional advertising channels to cement their place with Amazon. Even though Amazon has small grocery market share, brands think the next few years are critical because once shoppers establish regular shopping lists online, it will be hard to woo them back. Big grocery brands and manufacturers spend $225 million on advertising and in-store promotions each year, with more money shifting to digital advertisements, according to Cadent Consulting Group. Big Food has been mired in a sales slump for years amid changes in how consumers shop and eat; having an Amazon strategy helps them signal to Wall Street they’re keeping pace with the changes.”