The Seattle Times reports that “Amazon has pledged to make fixes to its advertising operation after mistakenly charging online merchants to promote products shoppers couldn’t purchase.
“The problem came to light when a seller of advanced gaming computers discovered he was being charged thousands of dollars to advertise merchandise in California even though he had stopped selling his products there.
“Rob Robinson says Amazon’s automated advertising system continued to promote his merchandise in the state even though customers couldn’t order it. Because he was being charged for ads that weren’t generating sales, Robinson says he made zero profit in November, December and January. Despite Robinson flagging the issue for several weeks, Amazon initially denied there was a problem.”
It was only when there were media reports about the issues that Amazon acknowledged “that he and other sellers paid for misdirected advertisements and that it was working to fix the problem. The company said it had apologized to Robinson and offered him a $15,000 refund — a fraction of the $300,000 he is seeking.”
The Times puts the problem in context:
“The stumble highlights a limitation of Amazon’s fast-growing and lucrative advertising business. Geographic targeting is a standard feature offered by competitors, including Meta Platforms and market leader Google, which for years has enabled companies to target users by location for searches like pizza joints, plumbers and psychiatrists. Amazon’s advertising business mostly focuses on matching shoppers with what they want without considering geography — and that’s why shoppers saw ads for Robinson’s products but couldn’t order them.
“The company has an incentive to get a handle on the problem. In an antitrust lawsuit filed last year, the Federal Trade Commission accused Amazon of boosting profits by selling irrelevant ads that degrade the customer experience.”
KC’s View:
There’s a lot to unpack there, but the bottom line seems to be that Amazon seems to have a growing willingness to tolerate a diminished customer experience if it will generate a little cash.
In some ways, here’s the quote from Robinson that ought to concern Amazon:
“The real problem with Amazon is there’s no escalation path when things go wrong. You have to go to the media and embarrass them.”
Amazon should be paying close attention to such sentiments, and moving quickly to address them. But either it is so big that such adjustments are impossible, or it doesn’t believe that these issues are important. Either way, the problems seem likely to get worse before they get better.
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