Amazon Readies Its Big Play To Scoop Up Non-Amazon Ad Dollars

Good afternoon readers, and welcome back to the AdExchanger Commerce newsletter.

This week, we’re catching up on an indomitable force in retail and a growing leader in advertising. Which are the same company: Amazon, of course.

On Amazon’s earnings call last week, CEO Andy Jassy said the company has “barely scraped the surface” of its advertising business potential.

Generating $12 billion in ad revenue last quarter doesn’t seem like “barely” scratching the surface. But Jassy’s right – Amazon Ads is just getting started.

Amazon is poised to make a great leap to truly join the ranks of ad platform greatness populated by Meta, which saw $33.6 billion in advertising last quarter, and, eventually, even Alphabet, which made a cool $61 billion.

The Amazon ecosystem

One of Amazon’s main strengths is, well, its strength.

Amazon has emerged as a true ecosystem in which other companies – even whole categories – can thrive.

Take Flywheel Digital, an early Amazon-specialist ad agency, which was acquired this week by Omnicom for $835 million.

Although Flywheel has branched out from its Amazon-only roots, it hasn’t gone far and is still “significantly Amazon-centric,” Omnicom CTO Paolo Yuvienco told me on Monday after the deal news broke. “That’s where the marketplace economy is right now.”

Amazon specialists are also in pole position when it comes to growing across non-Amazon retail media. Flywheel was one of Kroger’s three initial third-party retail ad tech partners, alongside Skai and Pacvue. It was also one of Walmart Connect’s first partners, along with Skai, Pacvue and Teikametrics, another Amazon native.

Skai is itself another example of Amazon’s pull. The company (formerly Kenshoo) was founded in 2006 and surfed the early waves of social media marketing tech. But it was completely reliant on Facebook and Instagram. In 2021, after its rebrand, Skai pivoted to retail media – and now has a heavy reliance on Amazon.

Amazon is becoming a more important hub for publishers, too. BuzzFeed and Hearst got a callout on Amazon’s earnings call last week after introducing Amazon-sponsored product listing audience extensions for their sites.

Meanwhile, the TV distributor Cox Communications uses Amazon’s clean room product – the Amazon Marketing Cloud (AMC) – to see which ad campaigns effectively drove online sales or correlate to in-store foot traffic lift.

“We don’t sell on Amazon, but it’s a place where people are buying things, consuming media and can be targeted,” said Louis Goldberg, Cox’s VP of consumer analytics, onstage at the Amazon Ads unBoxed conference last week.

Goldberg said his team, which isn’t part of Cox’s advertising business, was looped into AMC by an ad tech partner. But he said AMC’s adoption outside of advertising will make it “a part of the analytics data ecosystem,” extending far beyond Amazon seller accounts.

The non-endemic play

Still, Google and Meta have something Amazon doesn’t: Their immense auction power isn’t only coming from DTC ecommerce standouts or big-name global brands.

It comes from everyone. Literally.

To narrow it down just to the world of vehicles, for example, every mechanic, tow truck operator, car dealer, parking lot, driving school, one-person taxi company and food truck – anything that can be classified as a business – has a Google and Facebook account, likely with a credit card attached.

To be fair, Amazon has gone beyond its own product listings with Fire TV, Twitch and an off-site DSP (formerly Sizmek). But it only recently assembled a product and major go-to-market pitch for the every-business.

And not to get too rah-rah about it, but the new Amazon Audiences for SMBs “are bonkers amazing,” said Navah Hopkins, a pay-per-click advertising consultant and evangelist for the PPC vendor Optmyzr.

Those audiences can only be reached with display ads right now, Hopkins said, though Amazon will expand to other formats. Attorneys, for instance, can target and optimize for people who order certain books or particular items on Amazon. Car dealers and auto brands can tap into Amazon data, such as whether people have garages (Amazon has an in-garage delivery program and other info like garage-related product sales or Alexa integrations), as well as Experian data on car registrations.

AMC is the data hub for this targeting because the clean room is where Amazon Ads can infuse campaigns with Amazon first-party data without exposing customer information.

Experian is one of three data subscriptions within AMC that became publicly available in the US last week – although Experian only has vehicle data right now, not the full consumer data brokerage.

The others are Foursquare for in-store foot traffic and a feed called Amazon Insights, which is available via an à la carte payment and adds so-called organic Amazon conversions – as in, people who bought a product without exposure to an Amazon ad.

The Foursquare store-visits data encompasses dozens of stores, including most well-known chains, said Gloria Steiner, director of data intelligence at ecommerce advertising company Perpetua, during a demo at the unBoxed conference.

“This,” she said, “is especially valuable for brands that don’t sell on Amazon.”