Amazon decides it has sampled enough
Amazon.com is shutting down a program offering free product samples to consumers as a paid advertising service for CPG brands. The program drew controversy because the sample choices were based on Amazon’s data on individual customers.
Under the program that was launched at the start of the year, advertisers paid $2 per sample, on top of the actual cost of each product, to send shoppers free products included with their orders.
According to the program’s landing page, the samples were “like Amazon’s product recommendations, but real.” Participating brands included Folgers, Maybelline, Dunkin’, Kind and Quaker. The program was available to both Prime and non-Prime members.
The initiative was seen as one way to differentiate Amazon’s digital advertising business by combining a package of physical products, retail data and logistics that the Google-Facebook advertising duopoly couldn’t match.
Amazon didn’t specify the reason for ending the program.
“Amazon is constantly testing and launching new offerings to innovate on behalf of customers,” an Amazon spokesperson told CNBC. “At this time, we have decided to discontinue the sampling program in 2020.”
The cancellation comes as tech giants, including Amazon, Facebook, Google and Apple, are under pressure from antitrust investigations over the use of consumers’ private information. Amazon has met with increasing scrutiny amid revelations that Ring, its surveillance doorbell division, plans to share surveillance video with police agencies, building on concerns over the company’s Rekognition facial recognition software.
Still, the sample program may not have been paying off for advertisers or Amazon may have struggled with execution issues.
A past job listing described the “Targeted Sampling” program as such: “Free samples of new products are sent to customers selected using ML (machine learning), thus ensuring a higher likelihood of conversion than display ads. The program has a challenging mix of problems involving targeting, fulfillment, customer and vendor experience, and cross-campaign learning.”
The program required advertisers to buy a minimum of 25,000 samples, equivalent to $50,000. Advertisers concerns may have included Amazon choosing to prioritize its own private label brands ahead of third-party CPGs, limited access to customer information and a prohibition against remarketing to those receiving samples.
- Amazon Product Sampling – Amazon
- Amazon is shutting down a controversial advertising program that lets brands slip samples into delivery boxes – Business Insider
- Amazon kills program that sent shoppers free items based on prior purchases – CNBC
- Amazon ends creepy program that sent samples based on purchase history – Engadget
- Will Amazon succeed with brand sampling rooted in machine learning? – RetailWire
DISCUSSION QUESTIONS: Do you see sending free samples based on browsing and purchase history being more problematic than sending consumers personalized recommendations? Do you think privacy issues killed Amazon’s sample program, or do you suspect it was execution issues or a lack of sufficient value for advertisers?