By now you've had a week of coverage on the FTC's case against Amazon's ad auction, and you've got the gist. I wrote my own analysis for The Drum last week — including why advertisers should be offended by Amazon's defense, not just the conduct.
But as usual the more interesting conversation happened afterward, in my LinkedIn comments. So let's go straight to the question that actually matters to anyone with a budget: does any of this change where the money goes?
My prediction: sadly, not much. Though I would be thrilled to be proven wrong.
Game it out
There are only two directions this goes.
- If CPCs come down as a result of this, advertisers get cheaper clicks. And what does a performance marketer do with cheaper clicks? Buys more of them. Efficiency gains get reinvested, not banked. Amazon's revenue barely notices.
- If CPCs don't come down, budgets stay exactly where they were — because they were allocated to Amazon on performance, and for the largest advertisers they're already locked in up to a year in advance.
Advertiser confidence takes a hit either way. Some spend shifts as a retaliatory gesture. But it'll be marginal, and it won't survive the next quarterly review.
Neither outcome has money leaving the Amazon orbit anytime soon.
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Where the actual opportunity sits
There is a silver lining here for two groups.
Every other retail media network now has a window to play the transparency card — to show their cards on auction mechanics before anyone forces them to. Walmart Connect made noise when it moved to second price in 2022 and advertisers genuinely cared. There's a version of that moment available again, to whoever moves first. It expires quickly.
Advertisers have a narrow stretch of time in which asking hard questions is entirely reasonable rather than faintly rude. Use it:
- Do you use reserve prices?
- What have you changed about your pricing mechanics recently?
- Will you tell us when the auction changes?
You will not get a better excuse to ask than the month after a federal complaint.
The industry responds
The comments on LinkedIn when I shared this one were insightful. Three that got my attention:
Retail industry commentator Bryan Gildenberg on why this isn't the Google case:
"The Google case required a really deep understanding of how adtech works to nail the legal standard of 'monopoly' — 'I put in a fake bid to make you pay more' is a little more Tony Soprano than astrophysics — it's a much conceptually simpler case."
That's the crux. And Bryan's read on how it ends is the most concrete prediction anyone offered me:
"If I were their Chief Counsel I would say any case that sounds like wrongdoing to a judge and jury should be settled before it ever gets anywhere near one... I also really don't think Amazon want a ton of discovery from 22 AGs on the ins and outs of their advertising business. They'll probably settle and not admit wrongdoing — but this settlement may be more expensive than people think."
He also pointed out that the FTC's easiest path to a win runs through consumers, not advertisers: higher ad costs → higher prices. The algebra may not be provable, but it's easy for a jury to grok.
Which, notably, is exactly the door Amazon is trying to close. Its public response leads hard on no harm to consumers. The FTC, for its part, stopped short of claiming advertisers actually did raise their prices — it implied that CPG companies have the least margin to absorb it and are the most likely to pass it on.
Ecommerce consultant Katharine McKee made the point I wish I'd made about contamination:
"If previously most buyers bid $2 on an $.80 keyword, that does drive the lifetime value up even if the next round the winning bid had a delta. If a data company is looking at the spread then the second auction is materially bad and or incredibly easily manipulated."
This is the part that outlasts any settlement. If inflated clearing prices got averaged into what everyone understood a keyword to be worth, then the distortion isn't a specific sum that can be refunded. It's baked into years of benchmarks, bid recommendations, and every third-party tool that priced off observed CPCs.
The entire retail media market has been benchmarking in some way or another off of what Amazon has led with.
Host of The Middlemen Podcast Tom Limongello on whether the outrage translates into anything:
"I hold out a hope that advertisers might consider moving some budget based on the perceived savings on Amazon rather than plow more money in, but... if budgets are locked up for a year, the outrage will have settled long before there's an opportunity to make the change."
Two things can be true
An ad platform can mislead its advertisers and still be the best place to spend a performance dollar.
The money isn't on Amazon simply because the auction is trusted. It's there because that's where the shoppers are.
Moral disappointment is a much weaker motive to change than poor performance.
Read my original analysis at The Drum.
