The Death Pivot: When the Customer Becomes the Victim

Amazon’s first quarter results reveal something particularly worrying for its regular customers: the e-commerce giant, which for many years strove to offer the widest possible range of products and the best shopping experience, has reversed the fall of previous quarters with growth, albeit limited, but does so on the basis of its cloud computing and advertising divisions, notably the latter.

The problem is that the more money the company makes from advertising, the worse the shopping experience is. The company is about to make the death pivot: when a company goes from trying to satisfy its former customers to seeing them merely as raw material to sell to advertisers, who now become its most important clients.

Understanding the problem, that Cory Doctorow defines as the “enshittification” of the platforms, is simple: a customer who enters Amazon makes purchases that are usually relatively small in amount, and it is the aggregation of many customers shopping on Amazon that ends up making up a significant amount. It’s the philosophy it was founded on: if I sell a lot and work hard to try to provide the best shopping experience, I’m sure I’ll do well. But it has now realized that instead, what it can do is manage those customers, shepherding them toward the advertisers that pay the most. Given that the amount paid by advertisers is, in comparative terms and due to a simple question of asymmetry, much higher, the company changes its focus and starts to prioritize the service to those customers, the advertisers, instead of serving the users, as it did until then.

So now when you try to buy something on Amazon, what you see are basically ads. The list that comes up when you search for something is not headed by the best option, nor the product you really need, but the one that Amazon tells you that you should buy because, simply, it is the one that has paid the most. A clear prostitution of interests that puts the shopping experience in the background: what Amazon sells as a priority are no longer products, but ads, and you, as a buyer, are nothing more than the victim who receives them. You go in to buy, but you find that Amazon resells your attention to the highest bidder and puts before you not what interests you, but what pays the most to be there, before your eyes. The platform no longer serves the interests of its users as a priority, but those of advertisers. Analysts will be delighted. But believe me, you won’t be.

Amazon’s solution may seem like a good fix for a bottom line that seemed to be in free fall since the end of the pandemic, but it is a very serious mistake, a pivot that ends up with only one result: ruining the shopping experience, and sending customers in search of alternatives. At the same time, it’s not good for sellers, because it now costs more to sell on Amazon: if you do not invest in advertising in an environment where everyone else does, your products, even if they are what the customer is really looking for, will appear several pages behind in an infinite scroll that few reach, so sales fall.

Google also went from trying to deliver the best search results to relegating natural results to the background and covering the top of its page with its own editorialized by-products. Yahoo! went from offering a very good catalog, to presenting a sort of “bad newspaper” that was just trying to grab your attention for longer. Advertising, which many pundits see as the way to save the internet, is false friend that puts the user at the bottom of the list of priorities and ends up killing good business models.

Amazon said it would manage its advertising; it hasn’t and we, the customers, are the losers. Most advertisers, believe that the only advertising that works is the one that annoys us, that makes us uncomfortable, that tries to get us to buy things we didn’t want to buy. That’s how a shopping experience is ruined. There is no other possible analysis: the attention model, the one that only tries to make you look the other way and distract you with messages specifically designed for that purpose when you already knew what you wanted, is garbage. And unfortunately, that’s what we’ll increasingly find on Amazon.

(En español, aquí)

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This post was previously published on MEDIUM.COM.

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