Possible acquires Marketplace Ignition to reach further into Amazon territory
On the WPP Q4 earnings call, Sir Martin Sorrell talked about what keeps him up at night. His answer was Amazon.
Eric Heller (l) and Frank Kochenash
He talked about setting up a specialty agency in Seattle to focus on that. That agency is Possible, which is nearly across the street from the new Amazon headquarters. Now, Possible and WPP are upping their Amazon game considerably by acquiring acquisition of Marketplace Ignition, a leading strategy consultancy focused on helping retailers and brands increase their business on Amazon and other marketplaces.
“This is a big step, a big announcement,” said Jason Burby, president, Americas at Possible. “The reason we've been excited for it, there are three things that we think about and talk about a lot. One is where 50% of product searches now start on Amazon. Not Google, as everyone expects – of course some still happen there – but on Amazon. 77% of every dollar right now spent in digital advertising is at Google or Facebook. We know that. It's a two horse race, but we're seeing Amazon emerging as that third horse. EMarketer has a number aiming for about a billion dollars in ad revenue in 2017, which is good growth. More importantly, though, some of the predictions are north of $20bn by 2020, just a few years away, and it's changing fast. The third one, and this one blows my mind – two-thirds of US households roughly have Amazon Prime.”
To address Amazon’s increasingly growing importance, Possible started working with Marketplace Ignition on Amazon-specific campaigns, with clients like ConAgra, Nestle and others. That led them to pursue the company to be a part of Possible.
With offices in Seattle and Atlanta, Marketplace Ignition has worked with more than 400 brands, representing more than 2m SKUs and $2bn in annual retail sales. Their main goal is to establish and grow the eCommerce presence for their clients on Amazon. Launched in 2011, Marketplace Ignition is relentlessly data-driven and uses research and ongoing impact analysis to identify immediate and long-term strategic growth levers for clients.
The company specializes in operational marketing, the science of leveraging product data and channel expertise to optimize brand performance through online channels. With the growth in size and importance of Amazon including Amazon.com, Amazon Media Services, Amazon Prime and other services, operational marketing has become a fundamentally important part of online marketing and very few brands have a core competency in it.
That was a huge advantage for Possible and one that allowed for the merger. Marketplace Ignition saw an advantage in that Possible was one of the early partners that Amazon had in a number of areas.
“We're one of the first Amazon trusted creative partners, one of the first partners on the advertising platform, AAP, Amazon Web Services, we're an official consulting partner, Amazon advertising beta API partner. We got invested in this early. It's pretty exciting to see some fun things come out of it, like the Alexa skills development partner and an agency in that realm,” said Burby.
By bringing Marketplace Ignition into the fold, it allows Possible to look for other ways to invest in being the agency that can really help brands from big ad campaigns down to finding ways to deliver all the nuances of Amazon’s vast potential. To help with that, they turn to Frank Kochenash, Possible’s SVP global commerce, to help run what they call Possible Commerce. Marketplace Ignition will be labeled a Possible Commerce company. They will be within the Possible Commerce group that Kochenash runs. Eric Heller, the Marketplace Ignition founder and CEO, will report to Kochenash and Burby. Together they will grow existing clients, other clients within WPP, and will be moving into the Possible Seattle offices.
Burby gives it a few months for the teams to become comfortable working seamlessly together, but expects the transition to be a smooth one.
Addressing the Amazon challenge
Possible’s clients are increasingly asking questions about figuring out an Amazon strategy and better navigating the online marketplace. With Marketplace Ignition in place, Possible’s capabilities are boosted and clients’ questions can be answered and resolved.
“The challenge that Amazon presents to a brand is it's not strictly an advertising and media platform. It is those things, but it's obviously a retailer as well. It's a search engine. Even if you take the buy box away, it's the largest product reviews and product comments and reviews site. For a brand to succeed on Amazon, they need to have both of those sides of the spectrum. From an advertising point of view, it starts with conventionally the big idea, and then the campaign execution, and the media buying that goes associated with that,” said Kochenash.
“On Amazon, your brand can't succeed and no campaign or media will succeed if the retail fundamentals and operational fundamentals aren’t in place first. That's where Marketplace Ignition is most complimentary to us. Marketplace Ignition has honed this into a data driven science that they call operational marketing. They address questions like, what products should you be selling on Amazon? Once that's identified, they have metrics and they look at the ones that you want to be selling; how many are actually live? How many of those that are actually live have good content that converts well and represents the brand well?”
Kochenash gave several examples of how brands would work with the newly merged company. One would involve them researching the keywords, then auditing the content on a product detail page and determining what images need to be added above the fold to improve conversion to assess what keywords are being most searched by people, what keywords are converting best on their page search campaigns and making sure that that type of content is inserted into the product page. He described it like SEO and SEM, but entirely within the Amazon ecosystem.
Another example would be when a brand wants to launch a new product or put a brand extension on Amazon. The first thing they have to do is to set it up in vendor central, where there are hundreds of fields. It’s a merchandising activity, but also a marketing activity. Not only do the fields need to be filled out, there are also good, better and best ways to fill them out. Helping brands navigate that is key, as is comparing third party competition and selling.
One of the reasons Kochenash came to Possible was that he spent six years previous working with many sellers and brands on Amazon.
“I think that there's a great opportunity right now for brands to differentiate on the platform. There's two sides of this. There's the brand building and campaign execution and the big idea. But there's also the critical fundamentals that are more akin to retail and eCommerce. The solution that Possible's bringing is we're going to do both of those, because they both are needed for success on Amazon. I don't think any other agencies are looking at it that way,” he said.
“What we're doing is we're setting up for the demand that we think is going through the roof,” added Burby.
“We're already seeing some of that growing right now. We want to be that agency that can bridge the spectrum, again, from an awareness, all the way through. I think we're just scratching the surface with what is needed today. We're going to continue to see it play out over the next few years.”
Bringing in the culture of Amazon
Adding Marketplace Ignition is most helpful to Possible in that the staff there has plenty of people that have worked at Amazon, so they understand the business and the culture inside and out. The company’s singular focus on Amazon and helping brands maximize the value of Amazon means that everyone at Possible can learn about the business even faster.
“Culture's a big thing for us, not just grabbing talented people or grabbing revenue. We really wanted something that we thought we could add to what we're already doing, and do it in a way that aligns with our Possible approach of doing it, which is going to be about delivering results in a great culture, where ideas can come from anyone, and going from there. The more we talk with the team, we keep aligning on the great things we can do together. Clearly after talking to a number of groups, Eric also felt that we have the best potential together. That's how we got to where we are today,” said Burby.
“Possible understands the future of retail and the potential that brands have on Amazon, but the team also knows it requires deep knowledge of the entire Amazon platform and its ecosystem to succeed,” said Heller. “Category leadership on Amazon takes dedication, operational excellence and a deep understanding of how data drives sales and market share. Possible has data in its DNA and this, coupled with their award-winning approach, convinced me they were exactly the partner we needed to take our organization to the next level. I’m excited for what Marketplace Ignition and Possible will do together to deliver more value to brands and Amazon customers.”
Ultimately, Burby said that the advantage of the Marketplace Ignition acquisition is that it will help clients move products, which is the goal for any agency dealing in a retail space of any sort.
“If we now have a solution where, when we get people to Amazon, do a better job of them selling products, it helps everything upstream, above line, below the line…it helps all of those campaigns, initiatives, investments that we're making with clients be that much more effective,” concluded Burby.
Financial details of the acquisition were not disclosed, but hopefully Sir Martin can sleep better at night knowing his Amazon issue is being addressed.