How Amazon's ad growth will threaten Google, Facebook, agencies and ad-tech

Amazon's growing ad business not only threatens rivals like Google and Facebook, but also will affect marketers, agencies and ad-tech vendors that aren't prepared for significant disruption. 

Media and ad agencies will need to adapt to Amazon's growing ad presence as the company leverages its 47% share of U.S. e-commerce sales into other services. Agencies have an opportunity to develop expertise in Amazon advertising, or to acquire that know-how by buying Amazon-specific agencies. Ad holding company WPP in 2017 acquired consulting firm Marketplace Ignition to expand its Amazon-related business, which is one example of how traditional agencies are adapting to Amazon's growth as an ad platform.

Agencies also can develop consulting expertise to cover the broader e-commerce ad market as retailers like Walmart and Target expand their own media networks. The retailers will have more robust self-serve ad tools by the end of this year, giving brands more options. Walmart in April acquired Polymorph Labs to expand its ad services, while Target in May rebranded its Target Media Network to Roundel as part of an expansion into deeper ad integrations on Target.com and 150 other "brand-safe" platforms like Pinterest, PopSugar and NBCUniversal.

So I think that Ad-tech firms face the biggest threat from Amazon, which sees an opportunity to create an omnichannel service that combines its programmatic demand-side platform (DSP), search ad tool, customer data and ad-serving service into a one-stop shop of data and ad buying. Amazon this year acquired some of the assets of Sizmek, an ad platform that had filed for bankruptcy, to build out its ad services. The e-commerce giant also is beta testing an attribution solution for ad placements among a wider variety of channels. But still, Ad-tech vendors still have a role in helping marketers with ad placements on Google and Facebook's rival platforms.