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Amazon Cuts Out Ad Agencies, Working Directly With Advertisers

Amazon Cuts Out Ad Agencies, Working Directly With Advertisers

PerformanceIN

With questions around the transparency of the agency model, Amazon is reportedly working directly with advertisers on ad opportunities, removing the media agencies in the buying process.

Amazon is reportedly working directly with brands on advertising deals through part of its ad business, Amazon Marketing Services – completely cutting out media agencies in the buying process.

With the e-commerce retailer now the third-biggest media partner behind Facebook and Google, the company states that it's working directly with advertisers for deeper knowledge on retail analytics and data that may be relevant to its platform, such as product pricing and offers available.

“With some of our largest brands, we may work with our counterparts in the retail business to secure a deal for Prime Day, for example, and then put together a promotional plan to help make it successful,” said Seth Dallaire, VP of worldwide ad sales and marketing.

As reported on Digiday, the prospect seems to be well-received by advertisers with Amazon providing a clear understanding of what’s working.

“Given that Amazon search and Amazon reviews are a key part of the purchase journey for many of HP’s customers, Amazon’s ad product is an effective tool for us to drive the customer to our brand,” said Dan Salzman, HP's global head of media who are just one of many brands working with Amazon.

This is an interesting move from the e-commerce retailer as it continues to push its ad offering beyond its own websites and products, but more so a strategy that leaves questions surrounding the transparency of the agency model when it comes to programmatic ad buying and managing inventory.

A survey from Infectious Media last year found that 71% of advertisers criticised media agencies for struggling to adapt to programmatic while 53% believed it’s the results of agencies being “untrustworthy”.

Amazon’s continues its dominance in the advertising space with the company’s ad revenue up from 36% last year from national advertisers.

Following its annual shopping event Prime Day this year (July 16), the e-commerce retailer reported a record number of impressions (175 billion) earned by Amazon ads running ahead of and on the day.

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Mustafa Mirreh

Mustafa Mirreh

In addition to managing editorial on PerformanceIN, Mustafa reports on the latest day-to-day news updates from the world of digital marketing, while also doing social media promotion, live reporting of events, article features and interviewing key industry players and stakeholders.

Based in Bristol, Mustafa graduate with a marketing degree before delving into the world of music journalism through self-starting an online blog and collaborating with other publications. Now he has joined the PI team and has set his sights on succeeding in digital marketing.

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