How Sizmek DCO Fits Into Amazon’s Ad Platform Play

When Amazon acquired Sizmek’s ad server and dynamic content optimization (DCO) businesses last week, most of the attention fell on the server. And rightly so, since the server is the meat and potatoes of the deal.

But don’t sleep on the DCO solution as a potentially valuable asset for the Amazon Advertising Platform (AAP).

After Sizmek gained DCO technology with the acquisition of PointRoll in 2015, innovation slowed down, said Boris Fridman, managing director of Madison Alley, an M&A advisory firm in marketing and media.

But Amazon isn’t buying the Sizmek businesses for their product resources. And there are strong use cases for the DCO product within AAP.

Get creative

Despite Amazon’s massive arsenal of creative elements, including product images, reviews and ratings and A/B testing based on conversions, the company hasn’t offered a lot of creative tools.

For instance, Sizmek’s video designs are blasé and don’t natively display across the web, said Anthony Reeves, chief creative officer of Wunderman Thompson Seattle. Sizmek DCO will “pull that video advertising product forward” with more formats and inventory.

Amazon’s content optimization has focused on the elements that are most effective on Amazon, like how ratings, reviews or sales promotions appear in ads, or whether to include tags like “Customers also bought …” said Connor Folley, co-founder and CEO of the Amazon ad tech company Downstream.

But Sizmek DCO is built for other metrics, Folley said, like behavioral targeting, contextual targeting and location, and Amazon will need as it grows its ad network beyond its own site and app.

If ecommerce companies or manufacturers who rely on Amazon fulfillment want to send buying customers to Amazon, Sizmek DCO is a stronger proposition to create native ads that link back to Amazon, said BounceX co-founder and CEO Ryan Urban.

Out of the search and shopper silo

Amazon’s ad business is mostly search and shopper marketing, categories where creative isn’t a major factor. Coupons haven’t gone through a creative revolution online.

With Sizmek, Amazon can step out of search and shopper marketing, which are often their own pyramids within a large marketing org, and into more brand advertising accounts, Reeves said.

“Moving from shopper marketing activation teams to national branding will give (Amazon) access to significantly larger budgets,” he said.

Amazon is very strong in down-funnel, performance-based advertising, added Urban: “But for branding you need rich media capabilities, which is what Sizmek is really good at.”

Impact on DCO

Amazon’s purchase of Sizmek’s DCO could also elevate the category, Fridman said. If more brands are exposed to a DCO solution, they’ll review the market options. And he said independent players could benefit if brands leave Sizmek, once it’s subsumed by Amazon.

“If you consider Google’s DCO product, many brands that saw a need for that solution naturally gravitated to outside providers,” Fridman said. “And with Sizmek DCO within Amazon, I think brands will gravitate to others as well.”

This post was syndicated from Ad Exchanger.