March 29, 2024

Programmatic

In a world where nearly everyone is always online, there is no offline.

The Booming Business For Amazon-Only Ad Partners

<p>As marketers spend more with Amazon, they’re spawning a cottage industry of Amazon-focused ad tech vendors and service partners. Brands need specialists to guide them across Amazon’s sprawling marketing empire – a brand may deal separately with Amazon Advertising Platform (AAP), Amazon’s Alexa voice group, Amazon Fresh groceries, Twitch and the company’s packaging and shipment<span class="more-link">... <span>Continue reading</span> »</span></p> <p>The post <a rel="nofollow" href="https://adexchanger.com/ecommerce-2/the-booming-business-for-amazon-only-ad-partners/">The Booming Business For Amazon-Only Ad Partners</a> appeared first on <a rel="nofollow" href="https://adexchanger.com">AdExchanger</a>.</p><img src="http://feeds.feedburner.com/~r/ad-exchange-news/~4/HPByUbTN-I4" height="1" width="1" alt="" />
As marketers spend more with Amazon, they’re spawning a cottage industry of Amazon-focused ad tech vendors and service partners. Brands need specialists to guide them across Amazon’s sprawling marketing empire – a brand may deal separately with Amazon Advertising Platform (AAP), Amazon’s Alexa voice group, Amazon Fresh groceries, Twitch and the company’s packaging and shipment teams.

Brands need Amazon intermediaries not only to navigate Amazon’s networks but also to manage the product and pricing data they expose to the ecom platform.

AdExchanger spoke with some of the ecommerce advertising startups that are all-in on Amazon

Marketplace Ignition

WPP Acquired Marketplace Ignition in 2017 to ramp up Amazon and ecommerce advertising.

Revenue has more than doubled since it was acquired, said founder and CEO Eric Heller, a former category manager for Amazon’s retail business. Marketplace Ignition benefits from WPP’s client portfolio if a brand launches on Amazon or uses Amazon search.

Marketplace Ignition has integrations with other online retailers, but Heller said the group is focused on Amazon’s growth opportunity and not other platforms or developing its own tech.

“People ask how we don’t do ad tech product development or integrations,” he said. “But the thing is, Amazon’s technology is developing so fast and the tools are all off the shelf so trying to add something else right now would just slow that down.”

Velocity

TPN Retail, Omnicom’s shopper marketing agency, recently launched the ecommerce ad unit Velocity.

Velocity has seven dedicated employees, but shares resources with the larger agency, said Rami Odeh, TPN’s VP of digital commerce. About 50% of its client base comes from TPN brands.

With TPN’s legacy retail business, Velocity isn’t exclusively dedicated to Amazon. Brands already have marketing programs with chains like Walmart, Target and Kroger, so Velocity works with those retailers’ programmatic platforms.

Brands that do most of their business in physical stores also don’t want to silo Amazon and end up undercutting their prices in other channels, Odeh said.

Most of Velocity’s customers prefer a strategic consulting model, he said, because there are many features unique to Amazon, like its packaging and shipping program, private label competition or Amazon Fresh features.

Teikametrics

Teikametrics has 65 employees and 3,000 clients, mainly startup brands and sellers on Amazon, and is 100% dedicated to Amazon.

The startup raised $10 million last October.

“It’s a big difference understanding the nuances of costs and profitability on Amazon than with brands selling on ecommerce websites or retailers,” said John Shea, Teikametrics’ chief growth officer.

For instance, Amazon sellers rack up long-term storage fees for unmoved product and give up 10-20% for fulfillment, depending on the size and weight of the product and whether they use Amazon as a wholesaler, all of which affect pricing and ROI. Other platforms accommodate search, display and ecommerce product campaigns, he said, but only with Amazon is advertising intrinsically tied to merchandise price and overall profit.

Gradient.io

Bobby Figueroa founded Gradient.io last year after leading global operations for Amazon advertising. The startup raised $3.5 million and has eight employees.

“What I realized is that ecommerce is really a new frontier for digital marketers and brands need a ton of help to drive success,” Figueroa said.

Unlike many Amazon specialists, which are forced into consultant roles – without performance incentives or a percent of media spend – Gradient.io has a SaaS model augmented with a pre-negotiated share of sales or media.

“Many of the people who are responsible for [ecommerce advertising] budgets are taking more central roles within their brands,” Figueroa said. His plan is to build a subscription business as one of the must-have data and analytics sources for those ecommerce marketers.

Product Labs

Product Labs is an ad tech and analytics startup that works with Amazon sellers or brands with Amazon private label lines.

Product Labs distinguishes itself from other Amazon specialists by developing its own ad tech products, according to Brad Moss, managing partner and former Amazon ecommerce product manager. The pace of innovation inside Amazon means agencies can outsource ad tech to the platform, he said, “but it’s what we did inside Amazon and we felt we needed it.”

Moss said there’s a strong need for Amazon-based tech. Facebook returns audience demographics, for instance, like age and region, but companies rely on specialist vendors to collect Amazon data or metadata. Amazon’s inventory is also exploding across the web, whereas Google’s and Facebook’s growth comes primarily from owned media properties.

The Ortega Group

The Ortega Group, founded by three Amazon vets, totals 25 employees, more than half of them former Amazon employees as well. It’s a white-glove consultancy, said co-founder and CEO Adam Ortega, and works with brands launching on Amazon.

Shopper marketers are historically assigned to a specific retailer, but the practice is the same regardless of the store. Amazon advertising, though, requires specific domain expertise, which is why brands need to bring in a specialist instead of extending existing ecommerce and search programs to include Amazon.

“We have over 60 years of experience inside Amazon, all working full-time to be the Amazon experts,” Ortega said. “And with all that knowledge base we’re still learning something new every week.”

This post was syndicated from Ad Exchanger.