POV: Amazon Ad Buying
Mindshare Point of View: Amazon has built a self-serve tool to allow advertisers to purchase ads directly from the company in real time.
The self-serve tool is for ads on Amazon owned sites and a network of third party sites served through Amazon’s ad-serving platform. The tool has been in development since December 2011, although it has yet to run a campaign. According to Amazon it will gradually be extended to ‘select agencies’, though the exact timing has not been confirmed.
Amazon’s audience consists of 126MM* unduplicated unique users across its properties including online, mobile, Kindle and third party sites.
Automation of the media buying process on a large platform can have varied implications. In the current media buying process, Amazon requires a 30-day lead-time to secure all inventories. With an automated solution, there is the potential for media inventory management and lead times on Amazon to be reduced - although just how much information will be shared and how far in advance, is still unknown. Campaign optimization can happen in real time based on real time data and marketers could react mid-campaign to social media buzz that warrants a change in messaging or targeting strategies.
With large upfront commitments locked in early in the year, we have typically been able to negotiate discounted annual rates. It is unclear how this scale can be leveraged in a self-serve environment and whether these benefits would be lost.
Targeting options and reporting metrics available to advertisers are reportedly to remain unchanged, but under this model media teams would need to have their own Amazon experts well versed with Amazon metrics of consideration rates etc. to be able to optimize against the various targeting segments available on Amazon using this tool.
There are also a few legal and tactical issues that must be considered. Amazon insists on the right to audit agency and client systems and sites, which could be a huge hurdle and potential roadblock. The inventory available is also the same inventory we already buy. Agencies also cannot use any of the data from the tool in their DMP, which means there is no ability to connect the data to larger pools to gain additional insight.
At first glance it looks like the self-serve tool could be beneficial to small advertisers with low spends that do not warrant dedicated sales teams. In the light of all the unknowns and lack of transparency into what data is shared, Mindshare recommends a wait and watch approach at this time as it eliminates the value of the agency/strategy work that we do to ensure maximum campaign success.