Amazon: Its Artificial Intelligence Is Not Up to Snuff

July 10, 2018

I read “AI Is The Weakness In Amazon’s Push To Take On Google And Facebook.” I am not sure I can hop on board this train. One reason is technologies like Amazon’s Integration Based Anomaly Detection Service. I do not want to slog through this particular artifact from 2011, but it does reveal that the online bookstore has some reasonably sophisticated smart software.

The capitalist tool, however, takes a different viewpoint. I learned from the article:

Amazon has made a good start but to really move forward it will need to make its targeting much more effective. There are many users who have been on the receiving end of Amazon advertisements for products that they have already purchased. If Amazon’s advertising system is not even able to get this bit right, it will be a long time before it can really understand user behavior and make its advertising that much more effective.

Okay, Amazon does not use smart software the way Facebook and Google do. I think I understand.

The article continues:

This comes down the quality of the AI algorithms that it uses to understand its users and work out what products and services they are more likely to respond to. When it comes to this, Amazon is way behind Google but ahead of Facebook meaning that advertisers currently using Facebook might be lured away more easily. That being said, Amazon has been losing some sellers to Instagram (see here) where product discovery is easier given the lower volume of sellers and where the costs and conditions of selling are not nearly as onerous. Hence, for the simple stuff on its own website, Amazon’s advertising revenues should continue to grow nicely.

I like the idea that Amazon’s approach lacks the quality of Facebook’s and Google’s approach. Nifty assertion. I would suggest that perhaps Amazon offers advertisers a different value proposition based on cross correlation and specific real time browsing and purchasing behavior.

Probabilities are useful. But knowing what a person wants to buy at a particular point in time might cause some advertisers to sit up and take notice.

Artificial intelligence hoo-hah is sort of fun, just not as compelling as real time streaming data about specific user intent and actions.

Stephen E Arnold, July 10, 2018


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