Amazon loads Sizmek into a slingshot and aims at the Google Goliath

By Chris Pash | 2 June 2019
Wikimedia Commons

Amazon is purchasing Sizmek's ad serving technology, further positioning itself as a digital ad platform and a challenger to Google.

Buy-side platform Sizmek filed for voluntary bankruptcy in the US in March. Since then it has sold its data management platforms to Zeta Global.

Google had been rumoured to have been trying to grab Sizmek's ad server but Amazon announced an agreement to acquire Sizmek Ad Server and Sizmek Dynamic Creative Optimisation (DCO).

Sizmek's systems compete with Google’s Marketing Platform, by placing ads and measuring their effectiveness.

The purchase will add another tool to Amazon's advertising services, giving further strength to the retail giant's move on digital advertising. 

Financial details of the sale haven't been made public.  At the time of filing for bankruptcy, Sizmek valued its assets between $US100 million to $US500 million, 

"Sizmek and Amazon Advertising have many mutual customers, so we know how valued these proven solutions are to their customer base," Amazon said in a blog post.

"Sizmek has been searching for a buyer for Sizmek Ad Server and Sizmek DCO, and we are both committed to continuing serving their customers at the high standards they’ve come to expect."

Amazon says Sizmek Ad Server and Sizmek DCO will operate separately from Amazon Advertising for the time being.

"We look forward to working with the team, and we’ll share more updates as we invent and create new opportunities to better serve our advertisers over time," Amazon said in the blog post.

Amazon attracted so much advertising spend that it 2018 it became the third largest digital ad seller in the US, ahead of Microsoft and Oath and behind Facebook and Google.

Amazon's share is still small but it is growing fast:

emarketer amazon google

Amazon doesn't release separate numbers for its advertising division. For 2018, Amazon reported $US10.1 billion for its category called "other". In the fourth quarter "other" revenue was $US3.4 billion and most of that was for advertising services.

Google and Facebook’s combined share of the digital ad market will drop this year, according to eMarketer  However, they will still be the largest, making up nearly 60% of digital ad spending in 2019, or $US76.57 billion.

"Amazon’s ad business is growing faster than we (and everyone else) expected. In 2019, advertisers will spend $US11.33 billion using Amazon’s platform; not as much as on either Google or Facebook, but enough to start making a small dent in the duopoly," say analysts at eMarketer. 

The big advantage for Amazon is that it sells directly to customers and has a mountain of behavioural data on buying.

Amazon Advertising -- the new name for the combined units previously called Amazon Media Group, Amazon Marketing Services and Amazon Advertising Platform -- provides Amazon sellers/vendors/suppliers with a way to promote their products.

In Australia, Amazon launched advertising services last month following a soft launch with a select group of customers. 

Amazon has been building its presence in Australia, disrupting the online retail sector with the launch in late 2017 of local website amazon.com.au, the opening of massive fulfilment centres, launching Amazon Prime last year and showcasing Australian fashion.

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