🧑‍⚖️ The FTC Is On Amazon’s Case… Again…

The Federal Trade Commission (FTC) has accused Amazon of intentionally allowing poor-quality ads, referred to internally as "defects", on its platform to increase advertising revenue. 

Amazon ads are the darling of the ecommerce advertising industry at the moment with a rapid increase of 26% growth year-over year. But… It’s not all sunshine and roses. 🌹

The current ads in question are ones that appear not relevant to users’ queries and are said to harm the consumer experience by polluting search results and steering customers toward more expensive products. 

Amazon contests these allegations, stating that the claim is misleading and insists on their commitment to improving customer experience, citing research that most consumers find Amazon ads relevant and helpful. 

The issue raises concerns about the balance between profitability and maintaining a positive consumer experience. As the retail media sector matures, there's a push for industry standardization, but Amazon's lack of participation may hinder this effort.

Although there is some merit behind these additional ad placements leading to a worse customer experience, the Pilothouse Amazon team makes a very valid point, "That's just how advertising works." 🤣 If you go into a department store, they'll have products on an end cap, in the middle of main aisles, and higher or lower on shelves. It's all done with a purpose in mind and brands will pay more for additional visibility.

With Amazon under the FTC’s microscope, keep an eye on the potential changes that could become present on platform. If more controls are added to emphasize quality and customer experience, advertisers may see shifts in ad specs and an increased cost of advertising.