After buying Sizmek, Amazon will get paid to drive people to Amazon
With the deal for Sizmek’s ad server confirmed, Amazon increases threat to Google and Facebook. The difference is, it will get paid for driving people to its own website (AdAge).
Key points:
- Deal confirmed, but yet to complete
- Enables Amazon to target people outside of its properties
- Through ads placed outside its platform by marketers, Amazon will effectively get paid for driving traffic to Amazon.com
- Sizmek’s creative optimisation tech part of the deal, enabling Amazon to tout better, more personalised ads
- But Amazon ad specialists say the company must vastly improve reporting tools if it wants to compete with Google
- Others point to Facebook’s failed integration of Atlas ad server, warn success is not guaranteed for Amazon
Another brick in the wall. Competition is usually the sign of a healthy market. On the one hand Amazon’s buy, for a snip ($30m is being bandied around) will ultimately give marketers a choice other than Google and Facebook. On the other hand, that means there’s now likely to be three large walled gardens instead of two. Life just got that much harder for the independents and any advertiser seeking genuine choice.
But in pure, capitalist terms, you have to take your hat off to Amazon. It gains significant ad data and tech for (reportedly) less than 0.3% of the $11.2bn in profit it made last year. And now Amazon can effectively get paid on both sides of the deal while gaining more touchpoints and data from serving marketers’ ads. Amazon can also directly tie in ads served to products bought - across digital channels initially, though who knows where it might end up.
My money says eMarketer et al's next forecasts for Amazon ad revenue will be revised upward.
