Amazon is testing a new ad strategy that is changing the game of paid advertisements as we know it.
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Going beyond traditional digital display or video advertising methods, Amazon will begin delivering product samples to customers, selected specifically for each individual based on their buying habits.
This new Targeted Product Sampling program fits perfectly within Amazon’s business model - consumers already expect to receive packages from them, making this a non-intrusive ad experience. Additionally, they have millions of users that use the service frequently enough that machine learning will have plenty of data on their buying habits that can be used to determine other products they’ll like.
Moreover, this program gives Amazon an upper hand in the paid ad space. This ad model is something that Amazon’s biggest competitors -- Google and Facebook - can’t match.
Not only is this a huge differentiator for Amazon, but it’s likely a more effective advertising option for consumer goods. Sample programs have been shown to have a conversion rate of 25 - 30%, while paid ads are much lower - 3.75% for search and 0.77% for display.
How Does it Work?
Amazon hasn’t officially commented on this program, but early reports state that it will use machine learning based on consumer habit data to determine which samples are sent to customers.
Their product sampling page states that “Amazon surprises select customers with samples that we think will be delightful and helpful” and “you don’t have to be a Prime member to receive samples. Anyone with an active Amazon.com account is eligible to receive free samples”.
Customers have the option to opt out of receiving samples if they don’t want to participate in the program. However, it appears for now that all accounts are opted in automatically.
What Does This Mean for Marketers?
Offering free samples to consumers is by no means a new marketing strategy, but it is one that has been proven effective. Makeup brands like Sephora and Ulta send product samples with online purchases, and we frequently see sample booths at grocery stores and other retail shops.
Amazon’s ad Targeted Product Sampling program has the added benefit of access to their robust and diverse consumer base, allowing brands to reach a very large and targeted audience.
For companies selling consumer packaged goods, this will be a big opportunity to get right in front of your target audience. You no longer have to convince buyers that your product is right for them - they’ll get an opportunity to determine that for themselves.
This program also fights the “banner blindness” phenomenon, where users have learned to ignore any form of advertisement they see online. The internet is so oversaturated with advertisements, we’ve trained ourselves to essentially go “blind” to many that we see on a daily basis.
With this sample program, your product will arrive right at the prospective buyer’s door and ready for them to use - something that can’t be ignored. Combine this with Amazon’s AI technology that will send your products to only those who they deem qualified, and it only increases the chances of making a sale
If this program is successful (and I have strong feelings that it will be), it’s going to be interesting how competitors will follow suit in order to stand out in the market.