Amazon’s Free Sample Ad Strategy

Amazon is testing a program that partners with brands like Maybelline and Folgers to send free samples to potential buyers through Amazon’s delivery service – all based on what they know you’re likely to buy. 

While most of Amazon’s $5 billion ad revenue comes through targeted ads online, the company believes combining the free sample approach with customer data will provide “a higher conversion than display ads.” Analysts also predict the samples will create opportunities for Amazon to sell more of its own packaged goods and products.

How it works: the program uses machine learning based on Amazon’s customer data, samples of new products are selected and sent to certain customers. It will allow brands to put their products in the hands of the right customers and drive product awareness and conversion.

While some test subjects were perplexed after receiving targeted samples, a recent survey of 1.5k individuals found that only 33% were wary of their data being shared with 3rd parties. And with more than 100M Prime services subscribers, analysts believe this is a major breakthrough in its efforts to take on Google and Facebook’s ad dominance.

Why it’s hot: Free samples will become the new targeted ads which only strengthens Amazon’s position as a trusted delivery service. Amazon has the data and infrastructure to offer samples which could be even more effective than display ads on Facebook or search ads on Google. This in turn could result in increased revenue for Amazon and increased awareness and conversion for brands.