Amazon is simplifying its ad business as it looks to attract more brand dollars and take a bigger slice of the $88bn (£68.2bn) global digital ad market.
The company is rebranding its ad offering as Amazon Advertising, a move that will see it get rid of names including Amazon Media Group, Amazon Marketing Services and Amazon Advertising Platform. The marketing services business, which offered automated ad buying, will be referred to as the advertising console, while the ad platform will be Amazon DSP.
“This is another step towards our goal of providing advertising solutions that are simple and intuitive for the hundreds of thousands of advertisers that use our products to help grow their business,” says Paul Kotas, senior vice-president of Amazon Advertising.
The move comes after Google also rebranded its ads business from Google AdWords to Google Ads as it looked to simplify its offering. As part of the changes, it also introduced Google Marketing Platform to replace DoubleClick Digital Marketing and Google Analytics 360, and Google Ad Manager to unite its tools for publishers.
While neither update marks a significant change to the ad services Amazon and Google offer, they are an attempt to make it easier for advertisers and agencies to understand what is on offer and therefore, hopefully, make better use of the tools. Both Amazon and Google admit their ad businesses had become confusing and overly complex as they expanded.
Amazon’s ad ambitions
Amazon has rapidly expanded its ad business in recent years, introducing new tools and services that cover a range of areas from brand building to direct-response ads. However, Amazon admits this “created complexity”, making it difficult for advertisers to understand what was on offer and how to make use of it.
The Amazon Advertising branding is aimed at providing a one-stop-shop for all brands’ needs on Amazon, with product names also updated to reflect the now unified brand. That means, for example, that Headline Search Ads will now be known as Sponsored Brands, bringing it in line with the Sponsored Products tool that is already available.
While Amazon still derives the vast majority of its annual revenue from ecommerce, it is diversifying its business. A little more than 10% now comes from its cloud computing business, Amazon Web Services, and its ad business is growing fast.
According to Amazon’s most recent results, its ‘other’ division, which mostly consists of its ad business, saw revenues grow by 132% year on year to $2.2bn (£1.7bn) in the second quarter.
This is still a tiny fraction of the global ad market but it is growing quickly. Emarketer estimates that in the US, Amazon will take a 2.7% share of the digital ad marketing this year, with this growing to 4.5% in 2020. That would make it the third force in online advertising, ahead of both Oath and Microsoft.
And analysts believe the business could grow faster if Amazon ramps up focus on advertising.
Peart said. “So far, [Amazon] has been conservative in its ad load. It remains an open question as to when Amazon will take advantage of its significant reach and dominance in rich shopper data to ramp up the placement of ads in other areas,” says Monica Peart, eMarketer’s senior forecasting director.
Amazon has also been upping its pitch to advertisers, appearing at industry events such as Dmexco and Cannes Lions. Speaking last year, its director of international ad sales Dan Wright advised marketers to rethink how they might use Amazon to reach consumers by considering how they can add value to the customer journey rather than just using it to boost sales.
“Traditionally, people think if they sell products on Amazon they want to sell more products or start advertising to create value in that way. But the [real opportunity] is how do you solve a problem for the customer all the way through their journey in a way that is helpful to them,” he explained.
“If you do that through different engagement points, be it marketing on a box that’s shipped to a house or banners on a website, if that value is created through the process of helping the customer on their journey across all these different touchpoints, then you as a brand get value.”