Here's why Amazon is worrying the Google/Facebook duopoly

Amazon's presence in the APAC region poses a threat to the Facebook/Google duopoly, advertising agencies, and eCommerce companies. Here's why.

Five years ago, Amazon came out of the adtech closet, announcing a commercial interest in being part of the advertising industry. Within a year, Amazon built a self-serving, proprietary real-time bidding platform that plugged into exchanges and supply-side platforms.

Amazon used this data stack to retarget products at visitors inside its digital assets and properties, negating cart abandonment rates and becoming one of the first ecommerce companies to successfully cross-sell products to existing customers based on their browsing and purchase history. In an ecosystem where customer acquisition gets all the attention, Amazon went for the customer-retention angle.

Effectively, Amazon has gone from selling tangibles to an audience to now also selling its audience to the manufacturers of the tangibles.

In 2016, it announced a DSP and an SSP.

The Amazon Advertising Platform (AAP) reaches Amazon’s segments programmatically and is the only way to access Amazon owned sites, such as Zappos, Soap.com, Diapers.com and IMDB, across the web, mobile and video formats. To cover the SSP side of the equation, Amazon Publisher Services (APS) was unveiled as well.

Globally, Amazon has crossed the US$1 billion mark in revenues from its advertising division, backed by data predicated on actionable buying behavior, with an audience set that visits its properties with a purchase intent.

Whereas the audiences of Google and Facebook are merely consuming content and then being advertised to, the audiences of Amazon are in a shopper mindset and are more susceptible to ads around products that match their direct or complementary interests.

Anthony Capano of Rakuten Marketing mirrors this thought, preparing his listed retailers by "helping them to prepare for the arrival of Amazon by prospecting and retargeting consumers using data fuelled advertising strategies and partnering with key affiliate publishers to drive their own online revenue in a cost efficient, low-risk manner."

In terms of scale, the closest competitor to Amazon in terms of data for online shoppers is Alibaba, which recently tied the knot with Publicis Groupe to create a go-to-market platform called UniDesk.

Unlike the duopoly, Amazon is an online store first, a media-maker second (with Spark) and an advertising system third. With its eggs in multiple baskets, the duopoly would have to do much more simultaneously to have a chance against this end-to-end player in the digital ecosystem.

"As a major technology player," shares Xiaofeng Wang, a senior analyst at Forrester, "[Amazon] can also leverage its tech strengths such as personalization and intelligent agents to provide a better customer experience.”

“Brands must prepare for this new platform beyond just being listed," insists Bowan Spanbroek, head of strategy at iProspect Asia Pacific. "You need an end-to-end Amazon strategy including granular marketplace optimisation tactics. Brands who attempt this without the right approach or partner will face challenges in competing for consumer attention and loyalty.”

Babar Khan Javed is Campaign's Southeast Asia editor.