World News

Amazon criticised for not disclosing paid sponsorship in holiday toy guide

Published on: October 21st, 2019

Amazon.com’s ‘curated’ holiday toy guide contains more than 1,700 items from brands who reportedly paid a high figure for the coverage.  

Amazon.com has released its annual holiday toy guide, informing customers that more than 1,700 items were “thoughtfully curated to help shoppers quickly tackle even the lengthiest holiday shopping lists.”

Top toy lists are a time-tested way for manufacturers to stand out in the gift-buying season, with companies eager to appear on the lists.

Bloomberg has reported that Amazon sells holiday toy list sponsorship for as much as $2m. The more sponsors pay, the more products they can nominate to be on the list and the more prominently its products will be featured on the website. At least $20m in sponsorship was expected to be sold for this year’s list.

Robert Weissman, president of the consumer advocacy group Public Citizen, said that while charging for advertising is perfectly legal, it is a problem when Amazon tells shoppers recommendations are curated by experts but doesn’t disclose the money received from toy manufacturers. He added: “They don’t write ‘paid ad’ on it because it completely changes how consumers perceive the information.” Consumers place more value on recommendations from independent sources, so companies prefer to keep their financial involvement hidden.

Lists are a fast-growing part of Amazon’s advertising business. Amazon holiday gift guides promoting toys, electronics and home goods combined to generate more than $120m in revenue in 2017, up about 40% from the previous year, according to Bloomberg’s research.

In a statement, Amazon said: “We source product ideas from many places, including our selling partners who have the opportunity to nominate their best toys for the season and increase visibility of those toys.”

Amazon has likened the payments received to payments brands make to other retailers to be included in advertising circulars or to get prominent shelf space. Bloomberg also reports that Walmart charges brands to appear on its Buyer’s Picks toy lists in November and December. What sets Amazon apart from other retailers is the high costs involved, meaning that those companies with the deepest pockets are likely to take prominence.

Top toy lists are popular throughout the toy industry woldwide, particularly during the peak holiday season, and unqualified endorsement of selected products can presents a grey area for consumers.

Public Citizen also lodged a complaint in July with the Federal Trade Commission about Amazon’s annual Prime Day in summer, alleging the retailer didn’t do enough to help shoppers differentiate between paid promotions and genuine recommendations.

“When Amazon presents a Top 100 toy list,” continued Robert Weissman, “it’s a mistake to assume that shoppers understand this is just paid billboard space versus a list Amazon curated itself.”

 

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