There’s been a lot of breathless assumptions about Jeff Bezos’ business acumen and how he most assuredly will make the Washington Post into a profitable enterprise once again, because he’s a business genius. But then I read this comment from Henry Blodget:
Content and commerce companies have long dabbled with combining the two experiences, but no one has really nailed it. Given Amazon’s expertise in affiliate marketing and advertising, it’s not hard to imagine that the Washington Post could quickly become a laboratory for the next generation of integrated content and commerce.
Blodget’s piece is a kitchen sink, where he tosses out every possible reason Bezos could want to buy WaPo, but the above concept: That Bezos doesn’t have to build a profitable enterprise, because it’s a sunk marketing cost, blew me away.
Today, we’re seeing a third one emerge, content as a promotional tool. Marketers from Proctor & Gamble to Nike to MicrosoftMSFT -0.38% are developing their own content to reach out to consumers directly, without going through a third party media outlet.
Amazon’s purchase of The Washington Post represents the next logical step in “owned media,” the purchase of a major media outlet by a major marketer in order to sell directly to the public.
In 2012 Amazon spent $2.4 billion on marketing. Put in that perspective, a one-time $250 million charge for a content engine sounds like a pretty good deal doesn’t it? Adding more fuel to the fire, in 2012, Amazon controlled 2% of all digital ad spend, that means they’ve hit a wall on how much they can effectively do with display, ad words, SEO, what-have-you. They need a serious content engine and the Washington Post fits the bill pretty well.
Now who else might have a need for a massive, national content engine?