When Amazon announced the acquisition of Sizmek, it was seen as far from a footnote of a commerce behemoth picking up engineers from a bankrupt ad platform. I saw it as a move that would reshape the landscape of advertising as we know it.
On Friday, Ycor, parent company of leading European tech and data firm Weborama, announced a higher bid for Sizmek’s ad server and DCO engine. Yet an agreement for Amazon to acquire Sizmek’s ad server and DCO has already been signed and is going through court approvals. So, why did Amazon move to acquire, and why is Ycor throwing a wrench in the works?
Much has been said about Amazon becoming a formidable competitor to Google and Facebook. In 2018, the ecommerce giant topped $10 billion in revenue attributed to the advertising side of its business. But Amazon has its sights on a bigger prize: digital and TV.
Here’s why they are playing to win: Consumers want personalization. According to a survey by SmarterHQ, 72% of consumers say they now only engage with marketing messages that are personalized and tailored to their interests. Moreover, a study from Accenture found that 75% of consumers surveyed were more likely to purchase from retailers that knew their name and purchase history and used that data to provide recommendations based on their tastes. Based on these findings, it’s easy to see why Amazon’s ability to personalize results based on search and purchase history is already bearing fruit. In 2018, more product searches started with Amazon than Google for the first time.
What happens if Amazon can use advertising technology to put that consumer information to work for marketers? Then the game changes. Ad servers are the last mile, and dynamic creative optimization tools enable advertisers to create customized versions of each ad based on user preferences. They are the essential building blocks of advertising delivered over the internet, and Amazon understands that power. The Sizmek technology that Amazon wants will give advertisers stronger targeting, the ability to plan one campaign and target ads to different audiences and the ability to buy products from Amazon within those ads.