- Amazon is spending big on winning over advertisers in contrast to an earlier low-key approach.
- The online retailer is boosting its presence at major ad industry events and hiring key ad agency talent.
- It underscores the importance of Amazon’s ad segment to its wider business.
Though Amazon has steadily built its ads business into a $31 billion juggernaut, it has typically taken a more low key approach with Madison Avenue than its rival ad sellers.
While tech and media giants tend to make a big splash at tentpole ad industry events, it was unusual to even see an Amazon exec on the speaker line-up. “I don’t think you will ever see the [Amazon] yacht at Cannes, unfortunately,” Will Margaritis, then-lead Amazon consultant at advertising group Dentsu Aegis Network, told The Wall Street Journal in 2018, referring to the annual summer advertising festival on the French riviera.
How times have changed. At this year’s Cannes Lions, Amazon plans to rent out an entire “port” next to the main Palais theater to host meetings, panel sessions, morning workouts, evening soirées, and a “can’t-miss concert.” A ”
apartment” will be located a two-minute stroll away along La Croisette for advertisers to share a glass of rosé with the
service’s execs and creators.
Amazon has notably upped its presence at industry shows since in-person events returned. It was a key sponsor of this month’s Advertising Week Europe event in London, where it hosted programming in a virtual studio and plastered its logo on attendees’ lanyards. Also this month, several hundred ad buyers flocked to the Lincoln Center in New York City to watch its second-ever (but first in-person) IAB NewFronts presentation, hosted by comedian Amy Poehler.
Earlier this year, it sent out packages stuffed with NFL swag to TV ad buyers for the first time, reminding them that Amazon Prime is the exclusive broadcast home of “Thursday Night Football” this season. And the buying community has noticed Amazon sales reps are more collaborative in their approach, asking what they can do to get more of brands’ budgets.
“They are embracing not only the c-suite, which lots of companies do, but they are smart enough to understand the day-to-day decisions are made by the younger set – the media buyer, the brand manager, the planners,” said Advertising Week Global CEO Matt Scheckner. “They recognize the importance of connecting and building their brand and their business by engaging with younger people.”
An Amazon spokesperson had no comment.
Amazon is taking a page from TV ad sellers
From its humble search ad beginnings, Amazon has now grown to compete head-to-head with traditional players for TV, physical retail, and display advertising budgets — and its strategy to go after those dollars is finally mimicking established ad sellers.
Todd Hassenfelt, the e-commerce director of growth strategy and planning at Colgate-Palmolive, said he’s noticed a change in Amazon’s approach as it works to earn ad dollars from brand advertisers, a group that’s still not entirely convinced the platform can help them with their awareness-building goals.
“The easiest way to say it is, the Amazon focus has gone more from the bottom of the funnel to the top of the funnel,” he said.
Amazon hasn’t just upped its investment on industry boondoggles — it’s significantly upped its hiring of key ad agency and media talent as advertising becomes an increasingly important and profitable segment of its overall business.
In just the past year, it’s hired Amy Armstrong from ad holding company IPG to be director of global customer development; ESPN and Disney veteran Danielle Carney to lead Amazon’s NFL ad efforts; Meta and Google alum Anne Karp to manage relationships with Dentsu; and longtime agency vet Tim Castree as its vp of global content and media.
The charm offensive has been welcomed by agency executives. In prior years, an often-heard criticism was that Amazon’s siloed structure was difficult to navigate for ad agencies, who were used to the more hands-on approach from the likes of Meta and Google.
“It’s been encouraging to see Amazon recognizing the need to work closely with agencies to unlock the full potential their stack has to offer advertisers over the last 18 months,” said David Counsell, head of trading at UK media agency The7Stars.
Jessica Chapplow, head of ecommerce at the agency Havas Market, said: “There’s been a shift of headcount but also capability in their agency teams. If you’re having a conversation around DSP, or vendor solutions, if the point-person doesn’t necessarily know they absolutely go out and find it for us now. Whereas before it was just, ‘We don’t have access to that team, unfortunately,’ they go to the ends of the Earth to find it for you now. That for me is a big change and has unlocked more efficiency and productivity in our partnership.”
Amazon could be well positioned to ride out the economic storm
Amazon’s investment in the ad industry comes as analysts have sounded caution about a looming advertising downturn as some consumers rein in their spending. Snap CEO Evan Spiegel said this week that “the macro environment has deteriorated further and faster than we anticipated,” denting its revenue and sending down the share prices of other internet companies like Meta, Google, and Twitter.
Amazon could be less exposed than some of its rivals because its troves of shopper data can directly show whether spending on an ad campaign led to an uplift in sales. Now it’s making inroads beyond these so-called direct-response budgets to capture the full mix of marketers’ spend. A recent reorg of the ad sales team put a bigger emphasis on non-endemic advertisers that don’t sell products on the Amazon platform — and while some marketers are cutting back in the current environment, advertisers in non-endemic Amazon segments like travel, finance, and entertainment are upping their overall marketing outlay. And while other big retailers are nipping at Amazon’s heels for retail media dollars, it’s by far the dominant player — and will be an increasingly imposing one on the Cannes beach.
“They’re moving fast,” said Shaun Brown, head of commerce at the agency Tinuiti. “It’s a different game than what Google and Facebook are playing. And it legitimizes retail media. More and more, the Facebook model — it’s just a reach vehicle. And Amazon’s in retail. I would be slightly concerned to know Amazon is there to compete for the dollars they have historically owned.”