Amazon Expands Presence in Ad Tech Market by Encouraging Use of its DSP for Ads from Other Publishers
Amazon is making a move to secure a larger portion of the DSP ad tech market, urging advertisers to utilize its ad tech to purchase ads not only on its own media, but also from other publishers. This strategic maneuver is part of Amazon’s plan to expand its influence in programmatic advertising by forging deals with ad tech vendors for special pricing in exchange for preferential treatment.
To enhance performance and offer advertisers more options for purchasing in-app and CTV (Connected TV) inventory, Amazon has upgraded its integrations with Supply Side Platforms (SSPs). This move signals the company’s commitment to elevating its product to a level comparable to other Demand Side Platforms (DSPs) that cater to a broader range of marketers and budgets. By focusing on in-app and CTV deals, Amazon aims to bolster its market presence and overcome the limitations of relying on a limited number of DSPs.
Despite concerns about partnering with a massive entity like Amazon, SSPs feel secure in their collaborations, seeing less risk of unexpected developments. Amazon has maintained positive relationships with SSPs, leveraging their services without significantly disrupting their operations.
Amazon is presenting itself as a solution to the frustrations faced by SSPs, who often rely on a few DSPs and suffer from margin losses. By granting access to quality data and premium inventory, Amazon positions itself as an enticing choice for marketers. However, many marketers currently use Amazon’s DSP in a limited manner, mainly extending their campaigns running on Amazon to other sites.
To persuade advertisers to utilize Amazon’s DSP for ad purchases, the company emphasizes advertising on Prime Video, particularly in environments like “Thursday Night Football” and other biddable CTV platforms. By showcasing the effectiveness of its DSP in driving successful outcomes, Amazon aims to encourage broader adoption.
To compete effectively with major DSPs, Amazon’s DSP has undergone a transformation to become more omnichannel in nature. The company has revamped its dashboard and enhanced connectivity to the Amazon Marketing Cloud measurement solution. These improvements address past criticisms regarding complexity and reporting capabilities, with the goal of increasing impression volume, lowering marginal costs, and intensifying price competition.
Analyst comment
Positive news. Amazon’s expansion in the ad tech market and encouragement for the use of its DSP for ads from other publishers indicate a strategic move to secure a larger portion of the market. By upgrading its integrations with SSPs and focusing on in-app and CTV deals, Amazon aims to bolster its market presence and overcome limitations. Marketers are enticed by access to quality data and premium inventory. Amazon’s efforts to enhance its DSP, improve reporting capabilities, and drive successful outcomes aim to persuade broader adoption. Market is expected to grow.
