netzooid

Jeff Bezos says in a Wired interview:

“About three years ago we stopped doing television advertising. We did a 15-month-long test of TV advertising in two markets – Portland, Oregon, and Minneapolis – to see how much it drove our sales. And it worked, but not as much as the kind of price elasticity we knew we could get from taking those ad dollars and giving them back to consumers. So we put all that money into lower product prices and free shipping. That has significantly accelerated the growth of our business….more and more money will go into making a great customer experience, and less will go into shouting about the service. Word of mouth is becoming more powerful. If you offer a great service, people find out. ”

He’s talking about why Amazon would be a good fit for the video rental business. Now, I would just like point out some numbers which show how dead on Bezos is: Netflix, spent 16% of their net sales on marketing in the 3rd quarter of 2004. Amazon spent 2.3%.

What I want to know is what effect blogs have on a retailer like Amazon. How much does the linking drive up their sales?

This entry was posted on Sunday, January 9th, 2005 at 9:43 pm and is filed under Media.