Amazon's fight with the FTC contains an uncomfortable lesson for advertisers
Amazon is facing a lawsuit from the FTC over its ad auctions. Richard Baker / In Pictures via Getty Images A version of this post appears in the CMO Insider newsletter. Sign up for Business Insider's weekly marketing newsletter. CMOs are digesting an explosive lawsuit filed by the Federal Trade Commission against Amazon this week. The advice from marketing insiders on the next steps: Check your exposure and double down on independent measurement. The FTC's lawsuit accuses the retail giant of manipulating ad auctions to artificially inflate ad prices. Nick Manning, founder of the media consultancy Encyclomedia, said the suit's allegations present another sign to CMOs that "walled gardens and black boxes hold all the cards." The suit centers on "second-price auctions," which are common across the digital ad landscape. At their most simple: an advertiser sets the maximum price it's willing to pay — say, $1 — but if the next-highest bid is only $0.50, the advertiser would end up paying around $0.51. These auctions grew in popularity because advertisers could bid high to boost their chances of winning an auction without necessarily forking out the entire sum. The FTC, which was joined i
Amazon's fight with the FTC contains an uncomfortable lesson for advertisers
Amazon is facing a lawsuit from the FTC over its ad auctions. Richard Baker / In Pictures via Getty Images A version of this post appears in the CMO Insider newsletter. Sign up for Business Insider's weekly marketing newsletter. CMOs are digesting an explosive lawsuit filed by the Federal Trade Commission against Amazon this week. The advice from marketing insiders on the next steps: Check your exposure and double down on independent measurement. The FTC's lawsuit accuses the retail giant of manipulating ad auctions to artificially inflate ad prices. Nick Manning, founder of the media consultancy Encyclomedia, said the suit's allegations present another sign to CMOs that "walled gardens and black boxes hold all the cards." The suit centers on "second-price auctions," which are common across the digital ad landscape. At their most simple: an advertiser sets the maximum price it's willing to pay — say, $1 — but if the next-highest bid is only $0.50, the advertiser would end up paying around $0.51. These auctions grew in popularity because advertisers could bid high to boost their chances of winning an auction without necessarily forking out the entire sum. The FTC, which was joined i
