Amazon cultivates Amazon-focused agencies
Amazon is taking a page from Google’s playbook by creating account teams for Amazon-focused agencies in the U.S., according to two ad buyers who have met with executives from those teams.
These are smaller, independent agencies that Amazon executives believe can drive better performance from search campaigns than if they were to work directly with clients, the executives said. It’s similar to how Google catered initially to search-focused shops as it grew its ad business.
For the agencies, Amazon is more willing to introduce them to the larger advertisers it deals with directly as well as give them more access to newer parts of the ad platform such as voice and video, said the five agency executives interviewed for this article
“Amazon is often frustrated by agencies’ lack of knowledge when it comes to Amazon’s ads,” said one of the executives on condition of anonymity for fear of jeopardizing commercial deals with the retailer. “This lack of expertise is why so many Amazon-focused agencies have emerged over the years and the company has come to recognize that it is these businesses that can unlock the most growth. Amazon has doubled down with new account teams focused solely on Amazon-specific agencies.”
It’s a similar story in Europe, where Amazon is also bulking out its agency expertise. There are at least 12 agency-focused vacancies at Amazon’s offices in the region, with most centered in London and Germany, according to job listings on LinkedIn. The listings suggest a significant number of the recruits will try to help agencies understand the search and e-commerce part of the advertising model rather than the video or programmatic parts.
Rather than focus on the global media agencies in pursuit of larger media budgets, Amazon’s new agency execs are likely to focus on either search agencies or specialist units within wider networks that are more familiar with how advertising on the platform works, said one ad buyer at a global media agency, who revealed on condition of anonymity that their work with Amazon is limited to its search arm.
“Amazon’s sales team is smaller than either Google or Facebook, so I’ve met fewer of them over my career versus the duopoly,” said the ad buyer. “Amazon executives tend to be in our office less as in they aren’t taking people on jollies like most media owners would do. But that’s an Amazon culture thing, which is notorious for frugality.”
Amazon’s tighter focus on agencies stems from wider efforts to make its ads more accessible. The company’s advertising products aren’t as sophisticated as what either Google or Facebook sells to advertisers. Still, Amazon is expected to rake in $5 billion in ad revenue in 2018, according to eMarketer.
“Internally, Amazon has made the connection that there are agencies out there that are getting slightly better performance from campaigns than if they were to go direct to agencies,” said James Marshall, senior paid search director at iCrossing UK. “Amazon realizes spend could grow quicker that way. The company doesn’t mind going direct or through an agency, but if it can get to spend quicker through the latter, then that’s a relationship it will look to grow.”
We’ve reached out to Amazon for comment and will update the article with their response.
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