Puget Sound Business Journal, Bruno Gralpois, November 30, 2018
Seattle is on its way to becoming the next advertising industry nerve center, mostly fueled by Amazon’s rapid and powerful entry into the advertising business.
With such a large share of e-commerce transactions going through Amazon, it’s hard for anyone in advertising to resist the temptation to be active on the platform. While still significantly smaller than peer industry heavyweights Facebook and Google, the e-commerce and digital marketing giant is expected to generate up to $19 billion in ad revenue by 2020. As such, we are talking about a business opportunity large enough to produce waves of seismic proportions in the local advertising industry.
As Amazon rapidly grows its ad business, navigating that offering has gotten increasingly complicated for advertisers and agencies alike. To address this concern and growth prohibitor, Amazon recently unified its disparate ad business units — Amazon Media Group, Amazon Marketing Services and Amazon Advertising Platform — under one brand, Amazon Advertising.
Yet brand advertisers are often unclear on how to take advantage of these new capabilities, too often relying on agency partners without adequate Amazon knowledge and ill-prepared to successfully guide their clients.
That’s about to change.
Agencies now are opening offices in Seattle to build centers of excellence and strengthen their specialized skill sets on how to work with Amazon products and services. Some of these agencies offer media planning and buying, e-commerce optimization of display advertising, sponsorship, paid search, or data and analytics services, which rely heavily on an intimate, technical knowledge of the Amazon offering.
For example, if a brand wants to build “skills” on Amazon’s Alexa voice technology, it can now tap into a roster of more than 40 Amazon-trained and approved agencies and tools developers. It means that advertisers can rely on partners with the strategic and technical know-how to truly execute successful campaigns. From there, the brand has an easy pathway to enhance its go-to-market strategies and flex its new “Alexa skills” through both endemic and non-endemic paid advertising.
Amazon-only agencies or consultancies like Marketplace Ignition, now part of Mindshare, were started in Seattle or have established offices in the city to best serve clients on the Amazon platform. Advertisers should expect to see more agencies setting up shop in the Emerald City. They’ll follow firms like Hacker Agency, Wunderman Seattle, The Garrigan Lyman Group, Wongdoody, GreenRubino, and others who eagerly made Seattle their home.
Let’s face it: The proximity to the e-commerce giant has undeniable advantages, one of which is leveraging a pool of local talent with relevant experience and know-how. Amazon has been known to increasingly work directly with brands on advertising deals, cutting out the middleman in the process. Expect to see large brands building the necessary talent and relying on their internal teams to independently pursue these advertising opportunities with tech players.
Either way, the Amazon advertising phenomenon will fuel tremendous talent growth in the Seattle area in the future, as it did for the largest ad tech players — Adobe, Facebook and Google — in Silicon Valley.
Advertising is an incredibly dynamic, fast-moving industry, with new entrepreneurial concepts and indie shops opening every day in tech or cultural hubs like Paris, London, New York, San Francisco, Chicago and Los Angeles. Expect increasingly to see Seattle on that list in years to come.