Amazon closed in on a deal to buy Sizmek’s ad server and dynamic content optimization (DCO) business for an undisclosed amount Friday. The acquisition builds on Amazon’s mounting efforts to rival Google and Facebook’s ad businesses.
Sizmek filed for bankruptcy in March, weakened by the competition of walled gardens that claim the majority shares of digital ad spend. Despite its financial woes, Sizmek’s open ecosystem and unified platform has been widely regarded as a leading independent ad serving business behind Google and Facebook.
“Sizmek and Amazon Advertising have many mutual customers, so we know how valued these proven solutions are to their customer base. Sizmek has been searching for a buyer for Sizmek ad server and Sizmek DCO, and we are both committed to continuing serving their customers at the high standards they’ve come to expect,” Amazon said in a statement.
Why we should care. With the acquisition, Amazon will own both Sizmek’s ad server and DCO, which means it can collectively deliver ads to selected inventory while hosting ad assets and rich data. Amazon already owns a DSP for programmatic advertising, but the Sizmek deal will give Amazon the ability to deliver ads through a third-party ad server using its own data management platform (DMP). Once the acquisition is complete, advertisers will be able to use Amazon’s rich data from searches and purchases to target audiences on platforms beyond its own properties and network.
Following its bankruptcy, Sizmek’s liquidated assets came with an attractive draw: the platform’s scale and server offering is a direct contender to Google’s Marketing Platform (formerly DoubleClick).
With a third-party server like Sizmek baked into its ad business, Amazon can continue to build its ad business, which topped $10 billion last year.
Taking it slow. Amazon’s first-party data and dominance in the e-commerce space are potent ingredients for a fully-integrated and highly-targeted digital ad experience. But just like Facebook’s failed move to implement third-party server Atlas, there are lessons to be heeded. The integration and attribution process won’t happen overnight.
Amazon said it plans to operate the Sizmek Ad Server and Sizmek DCO independently from Amazon Advertising for now.
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