In the past months it hit the news the announcement of a major Strategic Partnership between Amazon DSP and Pinterest.
The partnership between the leader in ecommerce and one of the biggest social media platform, in fact, has the potential to be a major win for both platforms.
Below we speculate on some of the potential implications, benefits, and threats of the partnership:
Implications of the Partnership between Pinterest and Amazon
The partnership could give Pinterest a significant boost in advertising revenue. Amazon DSP is one of the largest demand-side platforms (DSPs) in the world, and it gives advertisers access to a massive audience of potential customers. By partnering with Amazon DSP, Pinterest could reach a much wider audience of advertisers and generate more revenue from its advertising platform.
The partnership could help Amazon reach a new audience of potential customers. Pinterest is a popular platform for visual discovery, and it has a large audience of users who are interested in shopping. By partnering with Pinterest, Amazon could reach these users with ads for its products and services.
The partnership could make it easier for advertisers to reach their target customers. Pinterest and Amazon have different strengths and weaknesses. Pinterest is good at reaching users who are interested in visual discovery, while Amazon is good at reaching users who are interested in making purchases. By partnering together, Pinterest and Amazon can offer advertisers a more comprehensive full-funnel solution for reaching their target customers.
Benefits of the Partnership between Pinterest and Amazon
For Pinterest, the partnership could lead to:
Increased advertising revenue
Access to a new audience of potential customers
Enhanced targeting capabilities for advertisers
For Amazon DSP, the partnership could lead to:
Increased reach to Pinterest's audience
Increased competition with other DSPs
Enhanced targeting capabilities for advertisers
This last point is for both companies quite paramount. Both platforms already possess a large amount of data on their customers, and with the integration of the 2 platforms, it will provide a better granularity and breadth of data to be leveraged to target the right customer, at the right time, in their funnel to purchase. Moreover, Pinterest users no longer will need to leave Pinterest platform and fill their payment details on the advertiser's platform, as this will processed by Amazon's previously stored checkout information.
Risks of the Partnership between Pinterest and Amazon
Given the size and the potential impact of the deal, the partnership could lead to concerns about privacy and data sharing in the following months. Both Pinterest and Amazon DSP collect data about their users and by partnering together, they will be able to collect even more data about their users. This could raise concerns about privacy and data sharing from the authorities.
The partnership could also lead to antitrust scrutiny. The partnership between Pinterest and Amazon could be seen in fact as an attempt to consolidate the online advertising market.
Conclusion
The partnership between Amazon and Pinterest is one of the most exciting, yet complex, arrangement seen in the online advertising world. However, the full potential of this integration will only be seen in the following months, when the integration of the 2 platforms is completed.
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