Digiday: Amazon to consolidate disparate ad businesses into single platform
- Amazon is reportedly consolidating its ad business into a single platform that can be used by both third-party and first-party sellers, sources told Digiday. The new platform would merge Amazon Media Group, Amazon Marketing Services and the Amazon Advertising Platform.
- Combining branding, content, product creation, merchandising and advertising in a central spot could streamline campaigns and make it easier for marketers to see the traffic on their products and where it originates.
- Amazon has been working on giving first- and third-party sellers access to the same tools, and is currently testing a data-based reporting system with those who sell products to Amazon that tracks campaign trends and metrics.
The news comes at a time when Amazon is positioning itself as a competitor to Facebook and Google in digital advertising. By merging its ad products, which currently include separate divisions for those who sell to Amazon and those who sell directly to the site's users, Amazon hopes to streamline an experience that currently can be confusing and sometimes difficult to navigate for marketers.
While Facebook and Google still dominate the digital ad space, Amazon ad business has been growing quickly. For Q2 2018, Amazon posted “other” revenue, which includes advertising, of $2.2 billion, and ad sales grew 129% year-over-year, which makes it the fastest-growing category for the company. Marketers have already been increasingly allocating more of their budgets to Amazon, as brands are attracted by the e-commerce giant’s large trove of consumer shopping data and large user base. More than half of all consumers begin their product searches on the platform.
A more streamlined, automated and centralized marketplace could potentially attract more advertisers or encourage existing ones to spend more. Amazon has been working on ways to score larger ad buys, and the company’s sales teams have been more often working directly with brands and CMOs, sidestepping agencies to build direct brand relationships. The more direct approach lets marketers delve deeper into analytics and discuss other aspects of Amazon’s business. Some marketers have expressed concern over Amazon’s role as both an e-commerce site and ad platform, as some brands worry that their ad spend will go toward supporting Amazon’s private-label segment and end up funding competitors.