With its new cloud-based header bidding, Amazon is taking another step toward building ‘an adtech powerhouse’

And its new Shopping Insights opens up its treasure trove of first-person shopping data to website publishers -- for free.

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Amazon made two announcements this week to grow its adtech business and make its shoppers’ data available to website publishers.

One is the launch of a cloud-based header bidding through a Transparent Ad Marketplace, and the other is a new Shopping Insights Service.

Previous Amazon ad-related services in its Amazon Advertising Platform have included targeting data via a demand-side platform (DSP) for retail partners. It allows them to deliver ads on other sites through selected ad exchanges to specific customers who have, say, searched on Amazon for high-top sneakers.

The retailing giant also sells search ads through its retail store. eMarketer has projected that Amazon will rake in about $1 billion next year from the various components of its ad business in the US.

“It’s a well-known secret that Amazon has been quietly building an adtech powerhouse,” video ad provider Cedato’s CMO Dvir Doron pointed out via email.

Amazon had previously offered a header bidding service, which sales intelligence firm MediaRadar has estimated was used by about 100 publishers, including Time, Hearst and the IBM-owned Weather Company.

Header bidding allows website publishers to simultaneously receive bids from multiple ad buyers, instead of relying on, say, Google DoubleClick’s daisy-chained bidding system that takes bids in sequence. Simultaneous bidding is intended to generate higher prices.

Amazon’s newest version of header-bidding takes place in the cloud, instead of in the web page of a user’s browser. This is intended to alleviate any delay in the page loading. The new announcement means that the retailing giant is now getting deeper into the business of helping publishers sell ads, as well as helping them buy targeted ad space.

Shopping Insights Service

The other announcement, a new Shopping Insights Service, provides more info to publishers about who is coming to their sites, using Amazon’s data about its shoppers and what they have shown interest in buying.

The Wall Street Journal, for instance, noted that the site for Time-owned Real Simple magazine tested the service and found that its visitors included “a significant number” of new mothers looking for baby products.

Currently, both the cloud-based header bidding and the Insights Service are offered for free.

Forrester Senior Analyst Susan Bidel told me via email that these announcements show Amazon is making a greater commitment to challenge the domination of the ad ecosystem by Google and Facebook.

She added that Amazon’s cloud-based solution is another step on the path toward a server-to-server solution for header bidding, since the browser-based implementation is considered by most publishers to be “hacky” because of latency issues.

Actually, Cedato’s Doron described this new cloud-based solution as “leapfrogging the rest of the header bidding industry with a low-latency solution which also gives them a head start” over Google/DoubleClick for Publishers. Antti Pasila, CEO of publisher monetization platform Kiosked, predicted that publishers will be moving toward a server-to-server implementation of simultaneous bidding next year.

But, Doron contended, the new announcement misses “key video header bidding ingredients,” so Amazon is, for the moment, overlooking this growing dimension of online ads.

‘A great move for Amazon’

Forrester Senior Analyst Richard Joyce compared Amazon’s advance in header bidding to Facebook’s Audience Network in that both are “ways to widen their digital ecosystems and allow marketers to use data that is extremely close to the customer — Facebook social data and Amazon shopper data — outside of the walled gardens.” But both giants maintain control of the data.

As for Shopping Insights, Forrester’s Bidel noted that it can help publishers deliver more relevant content to visitors, and to “more accurately value their audience segments, which will impact their ad packaging and pricing.” And Cedato’s Doron pointed out that this huge treasure of first-party ecommerce data is currently being offered to publishers for free.

“Ultimately,” Forrester’s Joyce said, “the bigger vision from where I am sitting is, helping marketers advertise better with Amazon, and closing the loop for measurement.”

“That becomes even more appealing to marketers when you start to think about physical Amazon locations as well. It’s a great move for Amazon, and if it takes off, they have the potential to build advertising businesses similar to Google and Facebook.”


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About the author

Barry Levine
Contributor
Barry Levine covers marketing technology for Third Door Media. Previously, he covered this space as a Senior Writer for VentureBeat, and he has written about these and other tech subjects for such publications as CMSWire and NewsFactor. He founded and led the web site/unit at PBS station Thirteen/WNET; worked as an online Senior Producer/writer for Viacom; created a successful interactive game, PLAY IT BY EAR: The First CD Game; founded and led an independent film showcase, CENTER SCREEN, based at Harvard and M.I.T.; and served over five years as a consultant to the M.I.T. Media Lab. You can find him at LinkedIn, and on Twitter at xBarryLevine.

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