While the Feds Look To Break Up Google, Amazon is Quietly Stealing its Playbook
Beware the power of the marketing cloud
Don’t underestimate the power of owning the cloud
In this case, I’m not talking about cloud computing (though Amazon does quite well there) - I’m talking about AMC - the Amazon Marketing Cloud.
Amazon rolled out AMC in early 2021. This week at Amazon’s unBoxed event in New York, AMC was on full display, as Amazon’s ad execs and partners espoused the game changing importance of the product.
I can tell you’re already bored. I do apologize for getting deep in the weeds here, but AMC - as I understand it - is designed to help Amazon advertisers bring together lots of data sets, create custom target audiences, use all sorts of analytics, manage privacy, and perhaps most important - better manage all of their media spending - not just on Amazon properties.
It’s a lot for one company to provide for marketers - especially one that sells ads to those marketers at the clip of $10 billion a quarter.
There was a time when a slew of big data enterprise companies - from Adobe to IBM to Oracle - initiated what became the marketing cloud space. The promise was that brands could put all their data in one place - a platform, maybe a dashboard - which would help them crunch the numbers and make sense of it all. Being a neutral third party was a big selling point of the marketing cloud leaders.
Things have changed. Amazon has its cloud. Google has one. Several of the big retail media players, including Walmart and Instacart have rolled out cloud products.
The objection that brands might have once had - “I don’t want to give a media partner all of my data”- seems to have been overcome by the idea that marketing clouds have built in clean rooms - so neither party’s consumer data goes anywhere it shouldn’t.
Still, there’s surely a larger reason for Amazon to raced forward with AMC besides wanting to provide a clean room- the more dependent that brands become on its tools just to operate their marketing efforts, the more likely they are to spend with Amazon.
An added benefit of AMC is that it purports to help marketers track the impact of all of their media spending - not just ads they run on Amazon. For example, when a brand runs ads on streaming TV, AMC can help tie that activity to searches and purchases that happen on Amazon.com
“Attributing that upper funnel spend was impossible without AMC,” said Gloria Steiner, director of data intelligence at Flywheel. That makes AMC both helpful - and awfully sticky, since it may know a brands’ customers better than they do.
AMC, “increased visibility into that entire path to purchase for consumers, and what actions are they taking afterwards as well,” said Colleen Orani, Senior Director Global Marketing at Energizer during an unBoxed panel. “These tools are going to continue to connect the dots for us.”
As one agency executive explained to me, it’s getting harder and harder for most ad sales companies to compete with the marketing and ad tech that Amazon has amassed- including its demand side platform, attribution tool and media planning suite. Building a product like AMC isn’t cheap, yet…
“This is so profitable for them,” this person said
Profitable, for sure. Monopolistic maybe? Depends on your point of view. This surely reminds me of a strategy that many people in advertising have long criticized- i.e. building a ‘full stack.’ For years, Google built out buy side tech, sell side tech, media planning tools, an exchange, etc. - and got tagged with the ‘walled garden’ label.
This strategy helped Google, along with Meta, to become the two most dominant players in digtal advertising. Now both are under fire from regulators (for very different reasons).
Meta got hit this past week with accusations that the company has exploited kids (something that hasn’t stopped many brands from spending). Meanwhile DC lawmakers are pushing to break up Google for essentially being too good at hoarding all the ad tech and martech brands and media companies might need.
Which is exactly what Amazon appears to be doing.
Of course, regulators are going after Amazon as well, but they’re concerned with the company’s massive ecommerce business, and its effect on all those mom and pop stores. Do the feds even know that Amazon has an ad business (even though it promises to be absolutely massive in few years)?
In a weird way, regulators may actually be encouraging this new arms race. After all, as cookies and mobile IDs go away, and all that signal is lost, marketers need partners that can help them sort out how to do digital marketing in this new era.
“The internet we’ve know for the last 25 years is ending,” said Rio Longacre, managing director, Slalom Consulting. “Data is going to be locked down in place. Brands are increasingly asking us - how do we prepare for this?”
Maybe move everything to the cloud? Even if it means that only the biggest tech companies will be able to compete?