Pardon my cynicism but according to the letter Discover spends $13MM a year at Amazon. Thus 500k more or less works out to ~4% of their budget.
My hunch is this will at most be a subject of chuckle between Bezos and David Nelms (Discover CEO) on the Golf course.
Bezos might roll some heads, install some "supervision", give them a discount on a future campaign...
Advertising budgets are not an exact science anyway. And Amazon is still the largest online retail site in the world - where else would Discover go to spend their Ad dollars?
That's what I would have guessed too, that $500K is basically a rounding error to a company like Discover.
However, he includes an e-mail from Discovery in the letter, which says "I cannot express my disappointment on how this has been handled, nor can I stress enough how incredibly important it is that we get this resolved as quickly as possible."
It may not be a huge hit to Discovery's bottom line at the end of the day, but somewhere in there is a promo department for whom $500K is a significant chunk of their yearly budget.
I wonder if someone was fired on Discover side for having the idea to run a campaign on the Kindle with such a bad ROI. But I am not familiar with the ad business, maybe the efficiency was in line with what could have been expected...
It was a new platform/venue with an company they were spending 30 times a much on advertising. This strikes me as a "nothing ventured, nothing gained" and "none of us realized they were a criminal organization". Unless all advertising venues are roughly this bad (Neilson has a service where they track advertising to allow companies to confirm they're getting what they paid for...) this one effort shouldn't be such a black mark for those on the Discover side, prior to their learning these ugly details.
Well, the efficiency was as low as it was because of an implementation bug on Amazon's side. It didn't work the way it was intended to. If it had, who knows, it might have done well. The campaign certainly makes sense to me in a vacuum.
Although right now Amazon are pushing Chase, not Discover instead. They have a "5% cash back" banner on the homepage (Chase Freedom card), and are also running the $10 gift card if you switch 1-click to Chase and buy something. You have a Chase card on your account and visit Amazon on any mobile device.
Could be related to this incident, could just be coincidence.
My hunch is this will at most be a subject of chuckle between Bezos and David Nelms (Discover CEO) on the Golf course.
Bezos might roll some heads, install some "supervision", give them a discount on a future campaign...
Advertising budgets are not an exact science anyway. And Amazon is still the largest online retail site in the world - where else would Discover go to spend their Ad dollars?