Sizmek activity in the Amazon

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Fifty Five London consider whether Amazon will be able to successfully integrate into the march industry.

Amazon has been moving steadily into the martech ecosystem in recent times, with its range of “Amazon Ready” tools to help brands manage campaigns in its own programmatic environment and measure the results using the Amazon Retail Analytics suite. Its acquisition in the past days of Sizmek has to be viewed within the context of a further enrichment of the tools that it offers its partners, and the acceleration of the bid by one of the world's largest retailers to compete directly with the Google Marketing Platform.

The opportunities for Amazon to create something unique and of significant added value to brands lie in building out better closed-loop reporting tactics between advertising and sales. Every brand is trying to improve their insights into the customer journey through the series of ads that led to the final purchase. The acquisition of Sizmek’s ad server will bring a universally accepted ad-serving tool into Amazon’s suite, alongside its creative optimisation and reporting capabilities.

But all of this is dependent on getting an integrated solution to work. It will be some time before we discover Amazon's plans and ambitions in each of these areas. If they enable brands and their agencies to run ads with any publisher or media channel and see the impact of their buys on Amazon, that would be a powerful proposition, especially to brands without established e-commerce capabilities of their own. If they can combine Amazon's proprietary data and its Reporting Analytics suite with Sizmek's technology pipes then it can theoretically be interesting, and then we would await to see the depth of insights that Amazon would be prepared to share with brands.

However, these acquisitions should always be approached with cautious optimism! It’s far from guaranteed that Amazon’s move will be successful, and the extent to which Amazon is actually planning to improve on and go after Google’s ad business is also unclear. In 2013, Facebook made a similar move and acquired Atlas, an ad server that could have been used in a similar fashion to how Amazon likely intends to use Sizmek’s. Similarly, from a technical standpoint, an ad server like Sizmek will not be easy to integrate - Facebook basically failed to integrate Atlas into the bigger Facebook ecosystem. Despite the obvious synergies, the acquisition was a failure, and Facebook shut down its adserver just three years later.

The parallels for Amazon with Sizmek are striking. Any large-scale overhaul of the Amazon tech infrastructure will be distracting and complex, and perhaps of limited ultimate value, partly because Amazon already has access to many parts of their advertiser's data. Amazon does not give brands access to all of these insights and it will be interesting to see if Amazon intends to change that with the Sizmek's acquisition.

If Amazon really has far-reaching ambitions in this area, then there are additional pieces of the jigsaw that they may also be considering to obtain through acquisition. For example, another natural fit will be the integration of a bid-management technology stack to enable Amazon advertisers to directly run campaigns on Google, Bing, Facebook and others and show the side-by-side performance of Google Ads. Marin or Kenshoo, which have lost a lot of value in the past two or three years, would fit this profile. Then the question would be whether Google would continue to provide API access under that new ownership

We remain curious about how Amazon will integrate the platforms. But we should expect it to be at least two to three years before an enhanced and fully integrated solution is ready to hit the market.

Richard Wheaton is the MD at fifty-five.

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