Amazon Delivered Ads For Unavailable Products

Amazon, the undisputed colossus in retail media advertising, has been serving up misdirected ads to viewers, according to reports in Bloomberg and Engadget.

A seller of advanced gaming equipment, which can’t be sold in California, says he was charged up to $300,000 for ads delivered in that state.

Amazon acknowledged that “a tiny fraction” of sellers had been impacted and that very few of that seller's ads ended up on the screens of Californians. In a statement to Engadget, Amazon said it has already apologized to the seller and will refund him $15,000.

While Bloomberg reports Amazon initially denied any problems, it later told Engadget it intends to reimburse any other advertisers affected by geo-targeting glitches. The company is “updating our processes to ensure any such ads are not charged going forward."



But don’t expect technical bobbles to slow Amazon’s ad growth down. In a recent report from Deutsche Bank, analyst Lee Horowitz writes that while there are plenty of compelling levers behind Amazon’s steady growth, the high-margin advertising business is among the most powerful, as it continues to scale new offers.

“Amazon has a clear path to between $4 and $6 billion of Prime Video advertising revenue in 2024 and 2025,” which means many of the prevailing Wall Street estimates are too low. Horowitz also believes there is “meaningful long-term optionality to broader connected TV advertising at Amazon via the Promoted TV program, particularly as Generative AI lowers the barriers to entry to build compelling TV ad content for small-business advertisers.”

In the fourth quarter of last year, Amazon’s most recent results, advertising brought in $14.65 billion for the quarter. Retail media experts estimate Amazon’s share of the industry at about 75%.

Amazon is not slowing down on the core ecommerce business, either. In a first, the company announced a six-day Spring Sale scheduled for late March.

Just as Prime Day has often focused on fall and holiday items, this event has a seasonal slant, including spring fashion, outdoor furniture and lawn and garden products.

Unlike Prime Day, son of Prime Day and most other site-wide sales, the Spring Sale does not require a Prime membership.

With similar perks, including fast delivery, Amazon will use the event as a way to push membership. In addition to the $139 annual fee and the monthly rate of $15, it also offers college students a six-month free trial, which then converts to $7 per month.

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