Via https://newsapi.org online business online marketing online business opportunities Five Big Takeaways From Amazon’s Acquisition Of The Sizmek Ad Server

Via https://newsapi.org online business online marketing online business opportunities

ad server

Updated at 11:50 EDT

Amazon announced on Friday that it will buy Sizmek’s ad server business and dynamic content optimization (DCO) solution, following a two-month sales review since Sizmek declared bankruptcy in March.

The deal would give Amazon the second-largest ad server footprint, trailing Google, and has important implications for Amazon’s advertising ambitions and the prospects for the independent ad tech ecosystem.

Bloomberg reported Amazon was close to a deal for Sizmekearlier this month.

An Amazon ad server was inevitable.

“Amazon is relentless about getting visibility into any data on consumer behavior,” said Connor Folley, co-founder and CEO of the Amazon-based ad tech startup Downstream.

And an ad server is a key source of online consumer data, since it spits out the online IDs that brands use to attribute sales or track shopper activity across the web.

Amazon is working with agencies to keep Sizmek clients

In the past month, the ecommerce leader has approached major agency groups about the prospects of an Amazon-owned ad server, according to three executives speaking anonymously due to nondisclosure agreements.

Amazon needed that early groundwork in place before moving on a deal for the Sizmek ad server because the company needs agency support to keep Sizmek’s accounts from fleeing to independent alternatives.

But agencies have incentive to work with Amazon in this capacity. Many holding companies are investing heavily in their own commerce agencies, or shops dedicated to Amazon.

The ecommerce platform may need agencies’ backing to keep some ad server accounts, but Amazon has potential data and partnerships that would accelerate agencies’ nascent ecommerce practices.

Sizmek clients want to avoid Google

Most of Sizmek’s brand customers are consciously avoiding Google, because they wanted to own the ad server data, instead of relying on the walled garden platform, said one agency exec. Amazon will rely on agencies to vouch for the ad server, now that the largest independent option will also be housed within a walled garden platform.

Some brands, especially those that chose Sizmek to avoid a walled garden’s influence on ad server and identity data, will ditch an Amazon-backed ad server. But Amazon has a good chance of preserving most Sizmek accounts, said executives who have heard Amazon’s ad server pitch.

“Not even Google can promise the kind of closed-loop attribution Amazon has with its transaction data,” said one exec.

Sizmek will get Amazon data once it no longer operates independently

“Once the deal closes, Sizmek Ad Server and Sizmek DCO will operate separately from Amazon Advertising for the time being,” Amazon said in apress release. The Sizmek ad server eventually will be absorbed by the Amazon platform.

Amazon can add significant value to the ad server by incorporating its logged-in user data and by connecting impressions to transactions.

But for privacy and competitive reasons, Amazon won’t apply that data while Sizmek is an open ad server, since buyers would then be able to identify and re-target Amazon shoppers elsewhere on the web.

Amazon vs. Google heats up

Having an ad server will pit Amazon and Google in even fiercer competition.

Not only will the two titans compete directly for ad server business, but Amazon is also working on a cloud-based product, similar to Google’s Ads Data Hub (ADH), where marketers can target or measure with Amazon’s user-level data without the data leaving the platform, according to two sources that have discussed the idea with Amazon.

Google’s ad server is the beating heart of ADH, since that’s where advertisers and ad tech companies can continue to access the Google ad server ID (formerly the DoubleClick ID). The Google ID has been pulled from the ad server in Europe, due to the GDPR, and Google plans to apply the policy worldwide starting next year.

As with ADH, Amazon can use its ad server and identity to create stronger audience segments within its own cloud environment, and then push those IDs out to its demand-side platform (DSP) – which in a few short years has already become the second-most-used DSP, again trailing Google.

“Amazon entering the ad serving space is a bit unusual,” said Erik Gebhardt, media director for the Omnicom commerce agency TPN. “But I think they know their existing platform for purchasing off-site advertising needs improvement.”

Independent ad servers still see opportunity

The deal is on its face a blow to the independent ad server category. Google already had a majority share of the ad server market, and now the largest alternative is also disappearing behind high walls.

Though it presents opportunities as well.

Independent ad servers were already seizing on new business because some brands won’t tolerate Google’s ad server ID restrictions, when those restrictions launch worldwide next year.

Some Sizmek brands will search for alternatives as well, especially with non-endemic Amazon companies, like automotive, financial companies or insurance, or brands that compete directly with Amazon (i.e. retailers and product brands that compete with Amazon private labels).

Amazon entering the market will also be a boon to independent players because its sales team and agency contacts will create a huge surge of RFPs, said Victor Wong, founder and CEO of the ad server startup Thunder.

“Everyone is going to take a look at an Amazon ad server, and if you’re evaluating Amazon’s tech you’ll likely have a more general review,” Wong said. “Any change that creates a spree of Google customers reviewing their ad server will be good for us, I think, even if Amazon wins some of that business.”

Amazon declined to comment beyond its press release.

Read More

Be the first to comment on "Via https://newsapi.org online business online marketing online business opportunities Five Big Takeaways From Amazon’s Acquisition Of The Sizmek Ad Server"

Leave a comment

Your email address will not be published.


*