Then it made a big move this month with the launch of server-side bidding for publishers, a major evolution of its header bidding product that reduces latency and increases bid transparency for publishers. [AdExchanger coverage]
Saurabh Sharma, director of Amazon Ad Platform, spoke with AdExchanger about the company’s evolving strategy and where it’s making bets.
What is Amazon’s ad tech strategy?
Most folks know Amazon as an ecommerce provider or a retail participant, but our roots, going back over 20 years, are as a technology company. We’ve applied the same focus on listening to customers, inventing on their behalf and investing in the long run when it comes to things as disparate as ecommerce, cloud computing and devices, including Echo.
We’ve brought the same approach to ad tech over the last few years that we have to the other businesses we run.
What’s the offering to advertisers?
SAURABH SHARMA: Amazon Ad Platform [AAP] is our proprietary DSP. It’s available globally. It’s the only way to reach Amazon’s segments programmatically. It’s the only way to access Amazon inventory programmatically. And it’s available across web, mobile and video in a transparent manner.
Are there other standalone components for advertisers, such as a data platform or measurement tools? Or is everything in service to AAP?
There are things that are related to AAP.
We have analytics and measurement capabilities. Today, that’s coupled with media-buying, but it is available.
And we have creative ecommerce capabilities. We can use product images from the Amazon retail catalog. We can use review information, how many stars a product got as well as pricing information to easily and quickly create customized or templated creative, and use dynamic creative optimization to rotate creatives to find the most relevant offers.
We offer all of that as part of our ad tech stack. And we make all of that available on both managed and self-service access. Clients can log in and run all the things I just mentioned themselves, or they can work with our account teams to do so.
What’s the offering to publishers?
We recently announced APS, or Amazon Publisher Services, which is focused on publishers and being able to take header bidding to the next level – moving it to the cloud, reducing latency and load times. That’s another big part of our programmatic strategy.
As part of the APS solution, we’ve released the Transparent Ad Marketplace, which provides transparency to publishers on exactly who’s bidding on their impressions.
We’ve had a header bidding solution in place for several years, and this is about making it more transparent and lower latency for publishers.
How do you work with agencies? And how do they prefer to work with you?
Today, we work with most of the big multinational agencies – the top six guys. We also work with a number of smaller, more independent agencies around the world, but that effort is just starting. We’ll be ramping up over time.
We’re seeing positive adoption, usage and growth. But we still see folks wanting to use the managed services option, wanting us to do the execution. It really depends on the advertiser or agency model and their preference. We’re able to support both.
Do you have a strategy to compete with independent, standalone ad tech stacks like DoubleClick? Many people think of AAP as an extension of your owned and operated sites.
When we think about advertisers for AAP, we think about them in two sets. There are endemic advertisers; that is, advertisers who sell products on Amazon. But we also do quite a bit of business with non-endemic advertisers – folks like restaurants, airlines or auto manufacturers.
For the endemic advertisers, we can provide a lot of unique retail value in addition to the media activation we provide through our DSP. For the non-endemic side, we focus on performance and cost-per-action success.
A quick example: In the US, we work with a major cable TV provider, where we run cost-per-lead or cost-per-action campaigns. And we’ve been able to achieve about a third of the advertiser’s CPA goals by using AAP, through a combination of remarketing, segment optimization and inventory source optimization. It’s a great example of us being able to be successful in a way that’s not tied to a retail experience.
What’s your scale right now, from the standpoint of won auctions?
We don’t break out the total volume, but we’ve been integrated with all the major exchanges for over three years, and we continue to see growth in new channels. Video has been growing, and there’s more focus on native formats. We see those as areas of opportunity to increase our supply footprint.
What’s your headcount?
We have teams on the West Coast, in New York and in Europe that are working on this. We don’t break out total headcount.
What Amazon data sets can be activated, and how does that work from a campaign workflow point of view?
We provide Amazon audience segments for our targeting capability. That’s built into our DSP. It’s the same capability that’s been available through managed service for several years. We’re just making it more self-service and available to agencies. You can select the audience segments you want to target ahead of time in order to provide more relevant offers.
Segments can be grouped into in-market or lifestyle. Lifestyle segments are more stable sets of behavior that persist over time. “Tech enthusiasts” might be a lifestyle segment we can offer. In-market segments refer to intent. Those get used for campaigns that have more of a call to action.
What about measurement?
We provide segment-level performance metrics so you can see how your campaign is running and make tweaks mid-campaign, to be able to drive down things like cost per acquisition or cost per lead.
Also as part of the analytics, you have the ability when running a campaign with us to see how relevant your ad is to segments that you haven’t explicitly targeted. That’s a great signal the advertiser has used to identify new segments they haven’t even considered.
Do you offer CRM integrations?
Like most large publishers these days, we do support the use of advertiser segments to customize ads.
People like to apply the word “stealthy” to Amazon’s ad tech industry presence. From your point of view, have you been stealthy?
We have been open, transparent and in constant communication with advertisers for 10 years, if you include the managed service. We’ve been iterating and bringing more value to those advertisers. Our focus hasn’t been on making noise but on listening to advertisers and doing what’s best for them.
Some assume Amazon’s non-core businesses, like ad tech, serve mainly to help offer more competitive pricing to the retail business. Could you speak to the broader vision as it pertains to the ad tech business model?
SHARMA: I disagree with the statement. If you look at Amazon Web Services, AWS serves as a standalone business. We feel the same way about devices as well. It’s the same for ad tech. We believe in it as a strong standalone business opportunity.
When we think about advertising, we believe we can drive value for both advertisers and retail customers.
A question on “walled gardens.” What can you offer the marketer that wants to get user-level ad impression data for its own reporting, either via an outside attribution platform or its own cross-platform optimization efforts?
Usually, when advertisers are asking for those capabilities, it’s focused on measurement and understanding the impact of the journey as a result of exposure to ads. Our approach to solving for that is to provide measurement and attribution on campaigns that run through Amazon and where we can provide path-to-purchase information.
And outside of Amazon? For example, would you carry tags from a marketer’s preferred DMP?
Our focus is on providing value that Amazon can create from our own attribution insights.
How do you charge?
For AAP, we charge for media that’s on Amazon. For media that’s “off-Amazon,” we pass through the costs, and then we charge platform fees.
This post was syndicated from Ad Exchanger.