Expecting parents with Amazon baby registries are getting some unexpected gifts.
Amazon sold sponsored product slots that let companies like Johnson & Johnson place ads alongside regular items in baby registries, the Wall Street Journal reported (paywall) Nov. 28. The ads were nearly identical to products picked out by the actual registrants—distinguished only by the word “Sponsored” in small gray text—and tricked friends and family members into purchasing sponsored items without realizing it.
Rana LaPine, 24, of Denver, told the Journal she didn’t realize an Aveeno bath-time set she bought for a friend was an advertisement until it was pointed out by a Journal reporter. “I feel terrible about that and wish I had gotten her something else,” LaPine said. “I usually am good about seeing things marked as ads.”
Amazon has rapidly ramped up its advertising business, and now ranks behind only Google and Facebook in US digital ad revenue. Most of the company’s ad dollars come from preferential product placement on Amazon.com that the company sells to manufacturers, similar to premium spots on the ends of aisles that a marketer might buy in a supermarket. In the first nine months of 2018, Amazon booked $6.7 billion in revenue in its “other” segment, which is primarily made up of advertising.
While consumers are used to ads showing up in search engines or on routine product lookups on Amazon.com, the baby registry scenario feels different because the sponsored products are being inserted into a private curated list, where consumers aren’t necessarily on the lookout for sponsored content. The ads were even dressed up with a “0 of 1 purchased” line. Target, Walmart, and Bed Bath & Beyond don’t put sponsored items in registries.
The Wall Street Journal reported that Amazon has been placing sponsored ads in baby registries for more than a year. The company calls them “native baby-registry product placements” and sells three per quarter, according to an internal presentation viewed by the Journal, for $500,000 plus an additional spending requirement for the advertiser of $500,000 to $3 million on other Amazon ads.
A spokeswoman for Amazon told the Journal that the sponsored listings are now being phased out.