Amazon is boldly asking advertisers to go all out with programmatic advertising, not just dabble.
The tech giants are trying to persuade advertisers to use their ad technology to buy ads not only from their own media but also from other publishers. This has always been possible, but Amazon's advertising executives have been putting a lot of emphasis on it lately.
In fact, the ad tech, known as a demand-side platform, has been the focus of conversations Amazon advertising executives have had with advertisers in recent weeks about buying ads on Prime Video.
But most importantly, Amazon's interactions with ad tech vendors in recent months and weeks underscore Amazon's unwavering determination to solidify its dominant position in programmatic advertising.
At least, that's the view of several advertising executives who have had those discussions. They chose to speak about themselves to Digiday anonymously, fearing repercussions for their relationship with the tech giant.
These conversations suggest that Amazon is trying to broker deals and build partnerships with ad technology vendors to make it easier for Amazon to buy its own ecosystem of ads beyond banner ads: in-app and beyond CTV. It's clear that there are. “Amazon is investing heavily in deals with supply-side platforms (SSPs) that help it secure better access to premium non-banner inventory,” one executive explained.
The executive said such deals typically include arrangements to “connect Amazon's demand with a variety of sellers at low rates with high signal integrity.” This essentially amounts to entering into a contract with an ad tech vendor to secure special pricing in exchange for preferential treatment.
However, these transactions are not simple. Technical ability is required. Amazon should upgrade its integration with SSP to enhance signal capture for in-app and CTV inventory, providing advertisers with more purchasing options and potentially improving performance.
Another ad tech executive elaborated on this point: The collaboration we're working on with them is primarily focused on in-app and her CTV. The objective is to elevate the product to a level comparable to other DSPs that cater to a wider range of marketers and budgets. ”
Despite all the talk about SSPs becoming less mediated by the largest DSPs, these talks demonstrate the resilience of the largest DSPs with direct relationships with publishers. Sure, Amazon's DSP may seek direct integration with very large publishers that are strategically valuable, but fundamentally, his SSP is still essential to the economics of the DSP. These are a single point of integration, can be paid with a single invoice, and are decoupled from the need to interact with publishers all at once.
SSP seems similarly pragmatic about embarking on a partnership with Amazon. They know there are inherent risks in working with such a huge organization, but they feel safer believing they are less likely to be blindsided.
For example, Amazon has always been very selective about the ad tech vendors it buys from, so the idea of the tech giant consolidating its buying power into fewer, but better, paths to programmatic inventory is something these SSPs are avoiding. It's like you can do it and there's no catch. . Similarly, while Amazon works directly with many publishers, services like Amazon Publisher Services and its transparent advertising marketplace allow companies to collaborate with SSPs without significantly disrupting their operations. We have been successful in maintaining good relationships.
All of this is a euphemism to suggest that Amazon's big push for SSP is rather timely. They are frustrated by their reliance on a small number of DSPs and the resulting loss of margin. Amazon is promising some kind of reprieve, and it's hard to imagine retailers and advertisers not knowing about it.
Considering all of this, it seems like Amazon is emerging as a winner.
The two most important things marketers look for when deciding which DSP to use are access to high-quality data and premium inventory. Amazon checks both of these boxes, making it an easy choice for marketers. Or is it? After all, marketers are creatures of habit and have very specific views on what they should use Amazon's DSP for: buying Amazon ads . And even those who don't agree with this view, those who use her DSP to buy ads beyond Amazon's ecosystem are buying ads in a very limited way. Typically, they already have a campaign running across Amazon and simply extend it to other sites outside of Amazon. This is fundamentally different from how advertisers use her The Trade Desk or Google's her DV360.
This is where advertising on Prime Video comes into play.
If Amazon's advertising staff can successfully persuade advertisers to use DSP to buy these ads, spending could increase significantly over time. They are already working with existing advertisers on this front, highlighting the effectiveness of Amazon DSP in targeting across the marketing funnel, especially in contexts such as “Thursday Night Football” and other biddable CTV environments. doing. The proposal is simple. If DSP can be successful in these environments, why not consider expanding its use further?
“Advertisers won't jump on board right away, but given Amazon's strategic shift and putting resources into more promising segments, it could garner more interest in the long run. said Skye Kanabeth, senior retail and e-commerce analyst at the company. Insider Intelligence. “Ultimately, it's about how much we can drive performance for advertisers through new initiatives like Amazon Publisher Cloud, DSP updates, and continued AI investments to supplement our already strong first-party data and targeting capabilities. It depends.”
Amazon's DSP re-introduction has been in the works for some time.
Over the past year or so, advertisers have noted how ad tech has become essentially omnichannel, a competitor to the two largest DSPs, The Trade Desk and Google's DV360. . It's completely revamped, from the way the dashboard looks to the way it actually connects to Amazon Marketing Cloud measurement solutions.
This task would be a challenge for any DSP, let alone one not known for being at the forefront of innovation.
In fact, advertising executives once believed that its complexity and inability to provide the comprehensive reporting expected hampered its effectiveness. Amazon always intended to address this issue at some point. You need it from an economic standpoint to run a large ad tech business. For DSPs in particular, a prerequisite for success is the ability to relentlessly increase impression volume, lower marginal costs, and compete more aggressively with competing technologies on price. Amazon could only do that with its own ad inventory for a limited time. Especially now, with the pressure on advertising to make the tech giants' streaming services big, profitable businesses.
“Many carriers had a feeling that Amazon DSP was not on par with other DSPs, especially when it came to CTV,” said Sam Bloom, head of partner strategy at PMG. “Amazon took all that feedback and now those same operators are telling us the product is much better.”
