Amazon and Meta Platforms form a rare "alliance": Instagram and Facebook can now directly link to Amazon shopping website with just one click.

According to the Zhongtong Finance APP, two major US tech giants, Amazon (AMZN.US) and Meta Platforms (META.US), the parent company of Instagram and Facebook, are testing an important feature that allows shoppers to directly purchase products from Amazon's shopping websites through ads on Instagram and Facebook social platforms. This move means that consumers can link their Amazon accounts to their social media profiles, which may make Meta's social media platforms more attractive to major advertisers and attract more shoppers to Amazon outside of its online store system.

This unprecedented collaboration between the two tech giants can to some extent help them withstand the tremendous competitive pressure from TikTok, which has already launched an e-commerce marketplace in the US market. In addition, the collaboration between Amazon and Meta also helps resist the challenges and pressure from emerging e-commerce players such as Temu and Shein.

An Amazon spokesperson stated that US consumers will see real-time pricing, delivery estimates, and product details from Amazon's curated ads on Facebook and Instagram. The spokesperson said, "This is the first time customers can directly see Amazon's Facebook and Instagram ads without leaving the social app and complete the payment settlement through Amazon's shopping interface."

Meta declined to comment and referred the question to Amazon. It is currently unclear how widespread this new initiative is, but some advertisers on the Instagram platform have already urged users to "shop on Amazon" and directed them to product pages and purchase buttons.

Maurice Rahmey, who leads a company that helps brands advertise on Meta and Google search engines, posted a video about this feature on LinkedIn. In his post, he stated, "This partnership could bring tremendous potential revenue to Meta, Amazon, and most importantly, advertisers."

Amazon and Meta Platforms Each Benefit

Amazon has been striving to better target customer groups beyond its main applications and the Amazon marketplace system, such as the vast potential customer base on social media platforms like Instagram and Facebook. The company launched the "Buy with Prime" service last year to generate logistics-related revenue from transactions on other websites and increase the value of Prime platform members.

Meta, on the other hand, has struggled to make positive progress in the e-commerce field. The company previously abandoned the Instagram Shop tab, which allowed users to find shoppable content in their feeds, and shut down the real-time shopping feature on Facebook and Instagram. For a long time, Amazon has been attracting "mission shoppers" who know what they want but are not good at discovering specific products.

In 2021, Apple Inc. made some changes to its privacy policies, allowing users to opt out of being tracked by advertisers. This severely limited ad targeting on iOS devices, resulting in Meta losing approximately $10 billion in ad revenue last year. Since then, Meta has been looking for ways to improve ad targeting and accuracy using artificial intelligence and other methods.

To attract and retain more advertisers, Meta recently launched a new Generative AI tool for all its advertising clients, expanding the coverage of early testing features. This allows marketers to create images and copy faster and improve ad performance using the new Generative AI tool.

It is understood that Meta's tool uses the company's unique AI technology to generate background images for products and comes up with different ad copy ideas or automatically adjusts ad sizes to fit advertising platforms such as Instagram or Facebook. The company said on Wednesday that marketers will be able to use these new features in Meta's ad manager and global accessibility will be completed next year.

Juozas Kaziukenas, the founder and CEO of online sales monitoring company Marketplace Pulse, said that online shopping apps and social media sites are often two separate islands that do not cooperate. However, he said that the collaboration between Amazon and Facebook shows that their strengths can complement each other. In a post about the agreement, he wrote, "Potential shoppers on social platforms can get more relevant ads and a faster checkout experience, while Amazon can gain more sales volume."