Inside the holding companies’ scramble to consult on Amazon: ‘The penny’s only just dropped’
Dentsu Aegis Network has followed WPP’s lead in opening a network-wide consultancy dedicated to helping clients navigate Amazon’s platform. The launch comes at a time of e-commerce budget land-grabbing among the holding companies, in a space previously occupied by smaller specialists.
Holding companies quietly launch Amazon consultancies
Dentsu Aegis Network (DAN) announced the launch of its ‘Amazon-focused strategic consultancy’ in the US this week (10 April). Sellwin, a clear-cut portmanteau of ‘sell’ and ‘win’, will not be housed within any particular of the company’s agencies; rather, its consultants will sit “like an umbrella layer” on top of all client accounts, according to president Travis Johnson.
DAN has hired six full-time consultants to staff the new operation, which will also tap the skills of 131 specialists across the entire network when necessary. It will offer clients help in understanding how to best tackle the duopoly’s biggest contender beyond the obvious practices of search and display.
“Clients also need help with pricing, logistics, content and policing third parties,” Johnson told The Drum. “These are all capabilities our clients have been asking for. [They are] currently using independent and smaller shops to deliver those services because it's not in the typical wheelhouse of agency holding companies – we're used to running media and creating ads.
"Retail, negotiations, profit margins, demand forecasting, inventory management...these aren't typically skillsets within holding companies.”
Currently working with 12 clients in the US, Sellwin will eventually be rolled out across other DAN markets.
The team will also advise on other retail properties at home and away, including Walmart, Target, MercadoLibre and Alibaba. It can currently guarantee two hours of weekly facetime with the notoriously secretive Amazon.
“It makes it easier for the day-to-day agency client teams because they don't need to have those meetings with Amazon – they're not missing out on discovering anything because our team is bringing it to them and tailoring those opportunities knowing that they're right,” said Johnson.
The emergence of the Amazon consultancy
DAN might be the first of the holding companies to publicise a calculated move into the e-commerce space, but it’s not the first of the Big Six to formulate such an offering. Omnicom’s Integer Group opened a similar e-commerce consultancy in Sydney in 2017 to time with Amazon’s entry into Australia, while its TPN digital commerce consultancy, Velocity Commerce Group, has run an Amazon practice “for several years”.
Over at IPG, Mediabrands’ Reprise launched an ‘Amazon Center of Excellence’ in 2018.
WPP has also been quietly building its own Amazon Center of Excellence (ACE) near the e-tail giant’s headquarters in Seattle. Launched last fall, it’s known internally as one of Mark Read’s passion projects and operates much like Sellwin – complementing and aiding the work of agency client teams, rather than competing with them for business.
The “capability” is currently run by GroupM and Wunderman Thompson staffers, and headed up by the latter’s president of commerce, Frank Kochenash.
“[Wunderman Thompson and GroupM] are like the two key components of the ACE, but it will draw upon all the agencies within the holding company, such as VMLY&R and Geometry,” he explained. “We’re not going to market and sell the ACE as an agency; our agencies ... are still selling and engaging clients. This is a capability that we are launching to help those agencies serve our clients”.
Kochenash, who worked for Amazon from 2003 until 2007, is joined by Anthony Reeves, a fellow veteran of the e-commerce company. Reeves quit his role as Amazon’s executive creative director in 2018 with a plan to manage his own e-commerce creative consultancy. Five months later, after struggling to “open the doors” for clients as a smaller operator, he ended up landing the job of chief creative officer of Wunderman Thompson Seattle and WPP’s ACE.
'The money has always been around'
Unlike Johnson, Reeves doesn’t believe that advertisers with substantial spending power had previously been working with smaller set-ups like his own to crack Amazon.
“I think the penny’s only just dropped with [clients] starting thinking about the budgets for Amazon,” he said. “The real difference I’m noticing is people previously had their search budgets that exist on Google, Amazon or anywhere; they have their digital budgets that they could run on Amazon and other platforms; and then they have their brand budgets.
“The money has always been around. But now, finally, they’re starting to realize how to put it all together to make it one seamless customer experience.”
The cash may be in hand, but this change in mindset – from ‘digital’ to the multifaceted demands of commerce – requires clients and agencies alike to change up their way of working. This is precisely why DAN and WPP have created their respective consultancy businesses – to seamlessly guide both brand and agency team in this transformation.
“When you look at the world of creativity, Amazon’s a very untapped marketplace,” said Reeves. “There’s a huge opportunity for creative marketers to make the best of it. The difference is you have to work a bit harder for it, and philosophically, you have to approach it from a different point of view, even from the point of view of the internal structure. How do you handle those different budgets to come together for one campaign?”
Leaner teams, bigger budgets
Johnson believes clients tend to have a good grasp of Amazon’s main offering – its website. What he’s noticed, however, is there are gaps in their knowledge when it comes to its ever-growing list of products: its sampling experiment, its Treasure Truck activation and its over-the-top video platform.
There are also huge opportunities for non-endemic brands (those that aren’t sold directly on the platform) to utilize Amazon data to inform their media strategies. However, not all chief marketing officers are cognizant of this.
So, to a certain extent, Amazon needs the likes of Sellwin and ACE to communicate all of this to advertisers. The company may be secretive, but it’s also “very lean and efficient”, according to Johnson.
“They don't have the numbers of salespeople and resources that the likes of Google and Facebook have,” he said. “What that means is, it's harder for them to get coverage across agency holding companies, whereby you have lots of different agencies in lots of different locations, and lots of client teams and nuances and matrixes.
"For a small team to knock on the door of every single client and communicate every single product innovation is impossible for Amazon to do. Now, we can help Amazon become more efficient.”
The march to diversity
Johnson, who toiled away at DAN for more than a year before Sellwin hit the market, is adamant the holding company is entering this space for the good of its clients. Yet as consultancies encroach more and more of the holding companies’ space, it would not be unfair to describe this trend as an industry-wide fightback on Accenture and co’s own turf.
Almost every one of the Big Six companies extolled the virtues of their ‘business transformation’ offerings in earnings calls this year; Publicis now plans to scale out Sapient and WPP has edited the language of its own mission to become ‘a creative transformation company’.
The emergence of the duopoly – search and social – may have put traditional shops on the back foot in the past. But now with a laser-focus on business outcomes, the holding companies are preparing their agencies for Amazon’s budgetary potential before the consultancies strike up their own dedicated functions.
The question remains whether they are already too late.