Amazon's CEO once famously said ads are "the price you pay when your product is unremarkable." But during the company's internal all-hands meeting in November, an employee asked the CEO if he's had a "change of heart" on buying ads for Amazon's own products.
"Yes, I changed my mind," Bezos said with a laugh during the meeting, a recording of which was shared with CNBC.
The company's promotion of everything from its Echo devices to Amazon Web Services led to a 72.5 percent increase in U.S. ad spending last year to $1.8 billion, according to Kantar Media, which tracks TV, digital, outdoor billboards and other platforms, but not social media. That pushed Amazon into the fifth spot among U.S. advertisers and represented by far the biggest increase among the top 10 companies. Amazon didn't even make the top 20 until 2015.
Bezos' about-face on advertising reflects the dramatic change in Amazon's business, which is no longer predominantly an e-commerce marketplace. While most of its revenue still comes from online sales, Amazon now has a whole portfolio of branded products and services that consumers and businesses need to see on TV ads and elsewhere. The four companies ahead of Amazon are Procter & Gamble, AT&T, Berkshire Hathaway (owner of brands including Geico, Kraft Heinz and Fruit of the Loom) and Comcast.