Amazon Cuts Out Ad Agencies and Works Directly With BrandsJuly 24, 2018
Amazon is looking to work more directly with companies on advertising deals rather than maintain its channels with ad agencies. Although Amazon is known for working closely with brands, this shift to reduce its dealings with ad agencies is a step in a new direction for the company. Amazon’s efforts to work directly with brands and create direct brand relationships is encouraging bigger ad buys and enhancing Amazon’s advertising business, a platform now worth over and above $2 billion.
Marketers are happy with Amazon Advertising according to reports. Amazon is allowing for deeper examinations of analytics and other data that may prove integral to the brand. Amazon prides itself for its ability to share what’s working best with brands when it comes to advertising. Amazon is able to show that its ad product is successfully promoting the customer’s brand. The proof is in the pudding, so to speak, as Amazon’s ad revenue has nudged up 36% from just last year. Brands are liking what they’re getting from Amazon — and it's attracting even more interest.
Companies like HP have found other benefits by working directly with Amazon such as increased operational efficiency. Many small companies are enjoying Amazon’s menu of “self-service tools” that allow them to market quickly and effectively.
Of course, that isn’t to say that Amazon’s model is going to put major ad companies out of business. Many traditional ad agencies are struggling, but Amazon isn’t attracting all businesses for a direct one-on-one relationship. Many companies find it difficult to resolve Amazon’s dual platforms — retail company and advertising platform. Some fear that supporting Amazon’s advertising platform is also going to wind up supporting Amazon’s retail efforts and its private-label business.
Another criticism that some brands have is that Amazon changes its policies — frequently. In fact, many companies have felt compelled to hire someone just to keep up with Amazon’s changes when it comes to its self-serve options and marketing policies.
Nevertheless, the Amazon model for advertising is something for brands to reckon with. Advertising with Amazon and establishing a direct relationship with the online giant can lead to big payoffs and certainly terrific exposure. Moreover, companies can’t get past this: Amazon knows precisely what people are buying and how they are buying it. That type of knowledge is power, and many companies find that establishing a direct relationship with Amazon offers many more pros than cons.
For now, brands should take time to consider what could be gained by working directly with Amazon. Amazon certainly seems to understand the benefits of working directly when it comes to its own profit margins. There are now enough businesses working directly with Amazon and talking about it. The word is out, so companies can more easily decide if Amazon Advertising is ideal for their bottom line.