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'I am not sure that is completely figured out yet': Amazon wants to streamline its sprawling ad business but buyers say navigating the e-commerce giant is still tough
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'I am not sure that is completely figured out yet': Amazon wants to streamline its sprawling ad business but buyers say navigating the e-commerce giant is still tough

jeff bezos

David Ryder/Getty Images

Amazon CEO Jeff Bezos.

  • Amazon is consolidating its ad business into one platform.
  • The move is aimed at streamlining how advertisers work across different teams at Amazon, but agencies say that the platform is hard to navigate.
  • Amazon's ad business sprawls across multiple groups that often overlap.

As Amazon's advertising ambitions continue to swell, the company is revamping its advertising business to consolidate multiple advertising products.

But some agencies say that there is still a lot of confusion about how ads are bought as well as how they work with multiple divisions, and that the changes don't fully address those challenges.

Amazon is renaming its advertising division Amazon Advertising, which will combine all of its e-commerce, search, display, programmatic, video and measurement offerings into one place. Previously, Amazon's ad business was divvied up into individual groups: Amazon Marketing Services (AMS) handled search advertisements; Amazon Advertising Platform (AAP) was Amazon's demand-side platform for programmatic advertising; and Amazon Media Group (AMG) focused on selling all of the company's products to brands and agencies.

"We've worked hard to scale our products and services for our advertisers and agencies, but we also recognize that in the process, we've created complexity around our advertising brands and product portfolio," Amazon wrote in a blog post.

"So we've been thinking about how we can invent and simplify to provide a better experience for our advertising customers."

  • Sponsored Brands are keyword-based ads that appear in search results
  • Display ads
  • Video ads
  • Stores, which are URLs that brands set up to sell products
  • Measurement like campaign reporting, insights and data from third parties
  • Amazon's demand-side platform for programmatic ads that run off of Amazon's website

Amazon is a threat to Facebook and Google but can be hard to navigate for advertisers

Todd Bowman, senior director of Amazon and eRetail for the ad buying firm Merkle, said that while the changes make it easier to understand the names of Amazon's ad products, the revamp will not change how he buys ads.

"This change is more to streamline their naming conventions versus actually changing how advertisers buy ads," he said. "The current naming convention has been confusing for many advertisers because they sound similar."

For example, services that AAP offers overlaps with AMG. Part of the problem, he said, is that Amazon's ad products were built separately to serve specific groups of advertisers like consumer-packaged-goods, retailers and so-called non-endemic advertisers that don't sell products on Amazon.

"Amazon has talked about eventually having everything under one roof or within one user interface, but that structure is not something that we will probably see in the near future," Bowman said. "As many of these products were built independent of the others, Amazon needs to figure out how to best incorporate them together and I am not sure that is completely figured out yet."

Amazon builds products for consumers first, not advertisers

Indeed, pulling together the nuts and bolts of Amazon's ad business is tricky, said Eric Heller, CEO of Marketplace Ignition.

"Amazon is getting more aware of how the big [ad] dollars are spent," Heller said. "Brands are right on the cutting edge of being able to figure out how to do direct advertising - by coordinating and joining up the different platforms, Amazon creates a single path to market that doesn't leave any of the programs sidelined."

Right now, buying a package of Amazon ads across all of its different properties and formats requires marketeers to "coordinate across a bunch of different groups and you would think that Amazon consolidating these groups would create a single conversation to accomplish what your goal is," he said.

While it may seem like a small tweak, it's a big change for a company that has historically not prioritized advertising. Even though Amazon's ad business continues to grow, advertising is only a small fraction of how the company makes money.

"They start with the customer and work backwards - that's what they always say," Heller said. "I think what Amazon is saying here is that the brands are the customer for this."