Amazon closed in on a deal Friday to buy Sizmek’s ad server and dynamic content optimization (DCO) business for an undisclosed amount. The acquisition builds on Amazon’s mounting efforts to take on Google and Facebook’s duopoly as a dominant ad server.
Sizmek filed for bankruptcy in March of this year, weakened by the competition of walled gardens that claim the majority shares of digital ad spend. Despite its financial woes, Sizmek’s open ecosystem and unified platform has been widely regarded as a leading independent ad serving business behind Google and Facebook.
“Sizmek and Amazon Advertising have many mutual customers, so we know how valued these proven solutions are to their customer base. 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 said in a statement.
With the acquisition, Amazon will own both Sizmek’s ad server and DCO, which means it can collectively deliver ads to selected inventory while hosting ad assets and rich data. Amazon already owns a DSP for programmatic advertising, but the Sizmek deal will give Amazon the ability to deliver ads through a third-party ad server using its own data management platform (DMP).
Why we should care. Once the acquisition is complete, advertisers will be able to use Amazon’s rich data from searches and purchases to target audiences on platforms beyond its own walled garden. If successful, Amazon’s ad product would send a clear signal to Google and Facebook, who would be up against a more fragmented ad landscape comprised of three major players instead of just the two.
Coming for Google. Following its bankruptcy, Sizmek’s liquidated assets came with an attractive draw: the platform’s scale and server offering is a direct contender to Google’s Marketing Platform (formerly DoubleClick).
With a powerful third-party server like Sizmek baked into its ad business, Amazon is showing all the makings of an early-stage adtech giant – if it does it right.
Taking it slow. Amazon’s rich first-party data and dominance in the e-commerce space are potent ingredients for a fully-integrated and highly-targeted digital ad experience. But just like Facebook’s failed move to implement third-party server Atlas, there are lessons to be heeded. The integration and attribution process won’t happen overnight.
In fact, Amazon stated it plans to operate the Sizmek Ad Server and Sizmek DCO independently from Amazon Advertising for now. Amazon will likely be working to round out and refine its ad product with robust attribution and intelligence integrations before it can emerge as a direct competitor in the adtech space.
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