Amazon CEO Andy Jassy unveiled a holiday advertising strategy centred around Generative AI, harnessing data from their 160+ million Prime subscribers to enhance ad targeting and expedite promotions. Amazon is betting on AI-driven, targeted ads alongside fast shipping and conventional discounts to attract more shoppers and advertisers.
Jassy emphasises the importance of advertisers making informed budget decisions, prioritising ads with high volume and performance. Amazon is also utilising generative AI to improve product images for advertisers, generating background pictures based on product details to spotlight third-party seller products.
While Amazon isn’t the first to employ AI in advertising, its vast scale is expected to drive wider adoption. Generative AI’s key advantage lies in its capacity to personalise ads for users. Analysts anticipate Amazon’s holiday quarter advertising revenue to reach US US $ 14.2 billion, up from US US $ 11.56 billion in 2022.
The AI-generated images could encourage hesitant shoppers to make purchases when products are more relevant. Amazon Prime, which costs US $ 14.99 per month or US $ 139 annually, not only increases advertising effectiveness but also results in more frequent customer purchases.
Amazon’s holiday-quarter revenue is forecasted to be between US $ 160 billion and US $ 167 billion, exceeding analysts’ US $ 165.6 billion estimate. Last year’s Q4 revenue for Amazon was US $ 149.2 billion.
Other companies like Ascendly Marketing are also using generative AI imaging tools, potentially impacting graphic designers and smaller ad firms. A downside could be ads with similar images for different products, making it harder for sellers to differentiate.
