NYT: Amazon Tries Word of Mouth
Now Amazon has turned its quantitative prowess on one of the most vexing questions in marketing: Is television advertising worth the expense? Amazon's answer is no. And it has canceled plans for any television or general-purpose print advertising this year. The company is so sure of its decision that it has dismantled its five-member advertising department, assigning the employees to other roles.
Jeffrey P. Bezos, the company's founder and chief executive, said that the television campaign did increase sales, but not by enough to justify the spending. Instead, Amazon has decided to concentrate on lowering prices, mainly in the form of free shipping for orders over $25.