Home Commerce Amazon Is The Latest Major Ad Platform Going All-In On Machine Learning Tech

Amazon Is The Latest Major Ad Platform Going All-In On Machine Learning Tech

SHARE:
Comic: A.I. Ad Campaign

The new hot trend in platform advertising is to put the machines in charge of everything.

It’s true of Google, true of Meta and, even more so as of this week, it’s true of Amazon.

On Thursday, the Amazon DSP rolled out a system-wide upgrade to its machine-learning and predictive algorithms, Neal Richter, the group’s director of data science engineering, told AdExchanger.

Richter said the upgrades include new capabilities with data fed by large language models (Mmmm … that’s some yummy jargon), which are in turn built on prior machine learning-based tech developed for the Amazon ad business. These models were already in use to expand online advertising addressability, but will now also support predictive analytics and campaign planning.

The upgrades were in development for a year and a half, and this is the first major overhaul of Amazon’s predictive algorithm in that time.

But the new machine learning ad products are not Amazon’s answer to Performance Max, Google’s black box AI buying tools, or Meta Advantage+ Shopping Campaigns.

Other walled garden platforms with machine learning-based ad products “withdraw control and transparency” for the advertiser, Richter said.

Amazon’s machine learning upgrade will now be a core function of the DSP for all advertisers, which means the product enhancements will not pull back on campaign transparency or analytics reporting.

The ability to bake predictive conversion analytics into its machine learning algorithm is a big advantage for Amazon. Google’s PMax and Meta’s Advantage+, which Richter is nodding at without naming, are both attempting the same trick, which is to connect ad impressions to sales. But those products include drastic reductions to campaign controls. Advertisers, for example, don’t choose their media, bid prices or creative, and also have no transparent attribution. This is because Google and Meta must preserve their own first-party data while combining it with someone else’s purchase data.

The Amazon DSP isn’t combining purchase data with anyone. It’s simply Amazon.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

“The backbone of our performance is how we measure ROAS and CPA, in real terms, on the store,” Richter said. “We have a direct connection with the cash register, so to speak.”

And don’t expect another 18-month wait before the Amazon DSP puts out its next piece of machine learning-related news.

More announcements will be coming this year, Richter said. “I think of this as just the starting gun.”

Must Read

A comic depicting people in suits setting money on fire as a reference to incrementality: as in, don't set your money on fire!

How Incrementality Tests Helped Newton Baby Ditch Branded Search

In the past year, Baby product and mattress brand Newton Baby has put all its media channels through a new testing regime for incrementality. It was a revelatory experience.

Colgate-Palmolive redesigned all of its consumer-facing sites and apps to serve as information hubs about its brands and make it easier to collect email addresses and other opted-in user data.

Colgate-Palmolive’s First-Party Data Strategy Is A Study In Quality Over Quantity

Colgate-Palmolive redesigned all of its consumer-facing sites and apps to make it easier to collect opted-in first-party user data.

Can E.L.F. Cosmetics Become A Consumer Destination, Not Just A Brand?

History can be a burden for a brand, if it means that company is too set in its ways to pivot and try new things. Just consider e.l.f. Cosmetics, the digitial-first, social-native brand that made good.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Digital-native brands need to figure out how to win in retail shelves. They're finding it difficult, to say the least.

DTC Brands Are Learning The Hard Way That Winning In Retail Can Be A Losing Bet

Digital-native brands need to figure out how to win in retail shelves. They’re finding it difficult, to say the least.

Browser Extension Developers Say Google And Apple Need CMA Oversight

A group of 20 web app developers sent a letter to the CMA claiming the regulator’s proposed remedies for increasing competition among mobile browsers do not address barriers to entry for mobile web extensions on iOS and Android.

A comic depicting people walking past digital billboard screens in a city

TikTok Wants To Win All The Screens, Not Just Your Smartphone

“There are billions of additional screens outside of mobile phones,” says Dan Page, TikTok’s global head of partnerships and new screens. “We want to be in all of them.”