Thread by @_buildd

Jeff Bezos once said, "Advertising is the price you pay for having an unremarkable product or startup."

For decades he mocked this marketing strategy, but Amazon Ads is now HUGE — $35B revenue 🤯

Not just Amazon, everything is becoming an ad network!

How? Read to know more 🧵

Structure:
1) Amazon is an advertising giant
2) Even Walmart wants a bigger piece in ads!
3) How Facebook makes money from ads
4) No more tracking!
5) Only if own data, you're the king!

Thread continues below 👇

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1/ Amazon is an advertising giant

Google & Facebook are leaders in advertising, but Amazon is their biggest challenger.

Amazon Ads already has a 12% market share & will grow to 15% by 2023!

Here's our deep dive on Amazon Ads:

https://twitter.com/_buildd/status/1468803905274400768

2/ Even Walmart wants a bigger piece of ads revenue!

Walmart made ~$1.5B in ads revenue in 2021, which is more than Twitter or Snapchat, whose entire business is ads!

More interestingly — It has DOUBLED its revenue in 2021 vs 2020, whereas Amazon Ads grew only by 50%.

(contd.)

But the world is changing and moving more & more towards privacy.

This is a huge problem for Facebook & Snapchat and will benefit newcomers like Walmart.

But HOW?

Let's rewind a bit and understand how ad businesses make money.

3/ How Facebook uses my data to make money from ads

Facebook, Snapchat etc. make money not just based on information you share through their apps but also from all the activity you do on your phone or computer.

How?

(contd.)

Consider you've an iPhone. Your iPhone has a unique identifier called IDFA that all apps can access & share.

Assume you saw a shoe advertisement on Facebook. You get distracted & don't click on it.

Few days later, you visit the shoe maker's website & buy the shoe.

(contd.)

The shoe company shares your IDFA with Facebook, and after tallying your ID, both agree that the purchase was made because you saw the Facebook ad.

Voila! Facebook Ads just made a sale.

Not just this, Facebook also shows ads across other apps based on this unique identifier.

5/ No more! You can't track my data & show me ads

Most people didn't know about this tracking. But as more & more users got to know, they started complaining about it.

In 2020, Apple changed the game when they switched the default for tracking user activity.

(contd.)

Users had to explicitly say YES to being tracked.

Sounds ridiculous, right? Who would say yes to that!

Well, you are right — 62% users directly said "NO, Thank you", offering a gut punch to Facebook & Snapchat's model!

6/ Only if you have your own data, you're the king!

Apple's privacy change hit these giants hard.

Youtube, Twitter, Facebook & Snapchat lost $10B in just 6 months!

But guess who benefitted?

Apple! Its ads business suddenly spiked & will make $20B revenue by 2025 🤯

(contd.)

Not just Apple, any company who "owns" data is a winner in this.

Amazon & Walmart have a lot of data about their users, just based on time they spend on their website or app.

Now this data becomes even more valuable given data across websites or apps can't be tracked.

(contd.)

So you're telling me that every company that owns user data is an advertising platform?

Absolutely yes! Any company that attracts you to their website and collects your data has the potential to be an ad network.

Everything, my friend, everything is an advertising network!

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