This excerpt is featured in an article originally published by Marketing Interactive.
Amazon is expected to double its ad revenue in the next two years, increasing its stake in the digital ad spend market to 12% in 2020. According to a Cowen study, which surveyed 50 senior US advertising buyers last December, Amazon is predicted to obtain more digital ad market share by next year compared to other platforms, reported Recode.
On the other hand, the study predicted Facebook to lose about 3% of market share, while Google’s and YouTube’s market share are expected to drop by “a modest amount” through 2020. In the meantime, Instagram is predicted to see a 2% increase in market share, balancing out Facebook’s loss.
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Omnicom Media Group’s chief digital officer, Rochelle Chhaya said while Amazon might take the industry by storm and turn the duopoly into a trinity, it will not replace any of the players.
“Today, success for brands means reaching the right consumer at the right time, place and with the right message and context. As such, ad revenue for publishers is not just based on inventory, but on their ability to enable brands to become storytellers. And to do that, we need to know who we are telling the story to,” Chhaya said. As such, data will play a “defining role” in whether Amazon will be successful in breaking the duopoly.
The news of Amazon’s growing market share will require agencies to rethink their data and platform strategies to see where Amazon fits based on the data and inventory opportunities it offers. Chhaya said that while the duopoly remains strong from a video product standpoint, other advertising formats will feel the impact of Amazon “much quicker”. Agencies will also be pushed to deliver higher value and more data opportunities, as clients will have more negotiation leverage for their budgets due to the increased competition that comes with a new player. Meanwhile, Chhaya said publishers require a clear data strategy and offering to compete with Amazon, as well as strengthen their core products and be very clear about the role they play in consumers’ path to purchase.
