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Here’s How Amazon Will Impact the Entire Advertising Ecosystem – Adweek

We’ve been hearing about Amazon challenging the digital marketing duopoly that is Google and Facebook for several years now. According to a new report from Forrester, however, the impact of Amazon’s continued expansion in advertising will have ripple effects far beyond the tech giants—and will be felt by marketers, agencies and ad tech vendors alike.

Forrester analyst and report author Collin Colburn said Google and Facebook aren’t feeling the heat yet, as dollars are not moving in a significant way. But 2020 will be a different story.

One sign the duopoly is gearing up for a fight: Both Google and Facebook have rolled out ad products to better compete when customers are searching for apparel or consumer products. This should be encouraging for marketers broadly, who can expect even more positive changes as Amazon forces the duopoly to innovate, according to the agency.

That’s in part because CPGs and manufacturers will demand better attribution for their media investments as marketers expect the same kind of accountability they get from Amazon for all their ad channels.

“Google and Facebook should anticipate fewer ad dollars if they can’t help marketers better justify their spend,” the report said.

Forrester cited performance marketing agency Performics, which said it is “seeing brand marketers and [CPG] marketers slowing their investment in Facebook because Amazon is giving them greater insight into the impact their ads are having on sales.”

In addition, Forrester expects to see advertisers reevaluate their media mix across the customer lifecycle.

In the report, the director of ecommerce for a multinational food and beverage company said, “Facebook hasn’t shown us they can go lower in the funnel toward purchase. Google has been the one to play more of the full-funnel story—and Amazon is going after that.”

From there, Forrester hints that Amazon’s success will inspire other platforms like Pinterest to compete, as well as other retailers.

“Amazon has paved a path for other retailers to confidently compete for CPGs’ digital ad spend,” the report said. “For instance, Walmart and Target pivoted onsite ad sales from a managed service to a self-serve model. Look for even more retailers to boost their media network offerings to monetize their traffic and improve attribution.”

Once CPGs start reevaluating their media mix, Forrester expects them to invest more heavily in retail networks than in traditional digital media.

But it is ad tech vendors that may have the most to lose. Forrester predicts Amazon will continue to build out its tech stack to help marketers more effectively buy and measure ads on and off of Amazon properties, like its attribution tool, now in beta testing.

Amazon is also capitalizing on the shortage of truly omnichannel ad tech vendors by combining its DSP, search ad tool, data set and ad-serving capabilities from buy-side advertising platform Sizmek into a one-stop shop of data and ad buying.

Molly Hop, senior vice president of commerce strategy at Performics, told Forrester this could be huge for Amazon as her agency is seeing a lot of businesses using the Amazon DSP to reach audiences they’re unable to target through existing ad tech tools.

Another competitive advantage for Amazon is its ability to help marketers further consolidate their ad tech stacks.

“Marketers are trying to consolidate both their agency rosters and ad tech stacks to better manage and gain insights from their ad campaigns,” the report said.

And Amazon is only beginning to tell its story to marketers.

Enrico Mirabelli, associate director and ecommerce lead at digital marketing agency iCrossing, told Forrester, “It is still early days for Amazon DSP. They haven’t yet been effectively communicating the value proposition against formidable DSPs like The Trade Desk or Google’s DoubleClick. But when they do, there will be plenty of opportunity [for Amazon].”

For ad tech vendors, the only answer is to “move faster and offer buying power across channels that Amazon can’t enter because of its competition with the duopoly,” Forrester said.

“Amazon will finally force tech providers to bring together search, social and display channels,” added iProspect’s Jeremy Hull. “It’s the only way third-party tech will be able to compete.”


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