Amazon hired Google’s former group product manager Sam Cox and Amobee’s former chief product officer Jamie Fellows to supercharge the growth of its demand-side platform.
Cox and Fellows will lead a DSP product team that employs a few hundred people, in an organization headed by Matt Battles, VP of multichannel advertising. Amazon confirmed the hires to AdExchanger.
“We are continuing to expand Amazon DSP’s differentiated capabilities,” Battles said, “including the integration of Twitch audiences and inventory, and expanded OTT reach through IMDb TV and Fire TV. In parallel we have accelerated the delivery of core programmatic capabilities across planning, audiences, creatives, supply, and campaign management to enable efficient, full-funnel campaigns for all brands, including those that sell in Amazon’s stores and those that don’t.”
Amazon’s DSP allows advertisers to buy both on the growing number of Amazon owned and operated properties (Amazon.com, Twitch, IMDb TV, Amazon Music) and across the open web.
The fast-growing DSP will soon be neck and neck with The Trade Desk, according to an estimate by programmatic consultancy Jounce Media.
Back in 2017, the Amazon DSP totaled about $600 million in ad spend, according to Jounce’s estimates. In 2020, that number rose to $3.5 billion, according to company estimates.
At the end of 2021, Jounce believes the DSP will grow another 26% to $4.4 billion in annual ad spend. It’s growing as fast as the Trade Desk, which will direct $4.9 billion in ad spend in 2021.
The product challenge ahead
Amazon’s DSP has long been a must for companies who sell products on Amazon.
But marketers use the Amazon DSP for its data and access to inventory, not for its ease of use or feature sets, which have lagged behind competitors like Google’s DV360 and the Trade Desk.
While the Amazon DSP has come a long way from its “clunky” early days, it still lags behind other omnichannel DSPs in three key areas: targeting, optimization and day-to-day campaign management, said Prerna Talreja, group director of marketplace at independent media agency Crossmedia.
For example, Amazon’s DSP lacks a lifetime frequency cap, she said. That’s an important feature for marketers who want to avoid washing ad spend or annoying their customers with repeat ads.
Campaign managers also can’t monitor details like campaign pacing or modify the end date easily in its user interface, which makes it time consuming to manage multiple campaigns for large accounts, Talreja said. The Amazon DSP is also missing sophisticated optimization levers, like bid modifiers, which make it easier to bid different prices based on geographical areas, .
Yet, ad buyers still give Amazon high marks because of its constant improvement.
The use and preference levels for Amazon “stunned” Advertiser Perceptions COO Kevin Mannion when Amazon showed up on its first DSP report in 2016. In its most recent 2020 report, the self-serve version of Amazon’s DSP also gained esteem among advertisers.
As evidence of the Amazon DSP team’s receptiveness to feedback, Talreja called out a laundry list of recent improvements, including a “highly anticipated” DSP API release, time-saving features, better access to inventory and improved third-party audience access.
The advertiser challenge ahead
If Amazon builds out its DSP product more, it could gain ground with advertisers who don’t sell on Amazon.com.
But while Amazon can target an endemic advertisers’ prospects and tie that advertising to purchases, the DSP must work harder for non-endemic advertisers.
An improved DSP might also attract advertisers to spend on Amazon’s growing media presence, including video (IMDB TV, Fire TV and Twitch), an audio beta (Amazon Music, the default option on Echo devices) and its publisher network.
Amazon’s test, as it hires more talent to develop its DSP, will be to add features that bring it to parity with other DSPs, while also building capabilities that showcase its best assets, from data to attribution to access to unique media properties.
“The big questions are, ‘Can they rival Google and The Trade Desk in self-serve prowess?’ and ‘Can they gain ground with non-endemic advertisers – those not selling on the Amazon platform?’” Advertiser Perceptions’ Mannion said.