Amazon starting AdSense competitor

According to Chris Beasly, Amazon is experimenting with their own AdSense-like program for members of their affiliate program. I've been a long-time member of the Amazon Associates program, but it's certainly not made me the kind of money that AdSense has, but this is an interesting development. Apparently what they're doing is contacting select affiliates and asking them to participate in a beta test. Amazon seems to like “split run” tests where 50% of the time they serve up the old feature/product/program and 50% of the time they serve up the new one.

It will be interesting to see how this develops. Amazon is already an AdSense Premium publisher itself — they shown sponsored links from Google on most product pages — and presumably if they actually come out with a competitive program they'll have to drop Google.

The biggest problem I see for Amazon in all of this is attracting the advertisers. Google's AdWords program has been running for a long time now, and has a huge army of advertisers willing to use it. With both Yahoo! and MSN jumping into the fray, advertisers are going to have at least 4 major ad networks to choose from if Amazon also jumps in. I think they'll be the underdog in that fight, for several reasons:

• they're late;
• they have to distinguish themselves from the other three; and
• they're a competitor to many retailers.

That last point is their Achille's heel. I don't think that fundamentally there's any kind of technology problem that would keep them from succeeding. After all, they already sell off access to their spare hardware cycles, so they have the horsepower, and they definitely have a legion of programmers that can do this stuff. (Though I also wonder if they'd end up having to strike a licensing deal with Overture/Yahoo! like Google did for the ad bidding process, which Overture had patented.) But, unlike the other three ad networks, Amazon is a retailer, which puts them in a different space. If you were to place an ad to sell TVs, for example, would you want to do it on an Amazon ad network knowing full well that Amazon itself sells those same TVs you sell? Probably not. Neither Microsoft, Yahoo! nor Google are seen by most retailers as direct competitors.

It will be interesting to see how this plays out. Apparently Amazon's having trouble attracting beta testers for this in the first place because an AdSense publisher can't show Amazon contextual ads on the same page as the AdSense ads, and not many of the high-traffic sites that Amazon's interested in want to forgo that revenue. And I don't blame them.

Advice to Amazon: You're probably better off going back to Google to renegotiate your current deal with them, or maybe look at the other two ad networks instead. If you want your own ad network, why not get Google to replace PSAs with ads for books/products you sell and split the revenue? Or come up with something unique and different.

Eric Giguere is the AdSense expert who wrote Make Easy Money with Google and the new e-book Uncommon AdSense.

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