Inside Amazon's push into advertising, as company prepares to open 2,000 person office, mostly for ad jobs, in New York
Amazon continues to make serious inroads into the advertising business. Its latest move: a new office in Manhattan that it says will bring 2,000 jobs, mostly in advertising … Tweets: @digiday Tweets: @digiday : Amazon is pitching to what the company dubs “non-endemic” advertisers — brands that don't sell on Amazon. http://digiday.com/...
Context & Ripple Effects
This 2017 Manhattan announcement is the hiring backbone of what became Amazon's ad business build-out: 2,000 mostly advertising jobs pitched at 'non-endemic' advertisers — brands that don't sell on Amazon — marking the shift from serving merchants to courting the broader brand market. Within months the push showed up in the numbers, with Amazon's 'other' sales, mostly advertising, jumping 139% past $2B in a single quarter (Q1's $2.03B ad-driven surge).
The office also set up the off-platform strategy that followed: plans to expand search and video ad offerings and sell more inventory outside Amazon's own properties (the 2018 expansion plan), which later matured into a retail-media franchise spanning everything from an Upfronts sales pitch to ads served on other companies' websites.
First-order effects
- A 2,000-person, mostly-advertising New York office puts Amazon into direct competition with Google, Facebook, and Madison Avenue agencies for ad-sales and ad-tech talent in the city where those rivals cluster.
- Pitching 'non-endemic' advertisers widens Amazon's buyer base beyond its own merchants, turning the company from a performance channel for sellers into a general brand-advertising destination.
Second-order effects
- Merchants gain ways to buy display spots across other sites and apps while Amazon pulls back its own Google shopping-ad spend (the off-platform display test) — shifting budget away from a rival's auction and into Amazon's.
- Agencies and ad-tech intermediaries like Kargo become distribution partners for Amazon inventory, forcing established players to decide whether Amazon is a client, a supplier, or a competitor.
Third-order effects
- If the pattern holds, Amazon becomes a full-stack media seller rather than a retailer with an ad side business — a trajectory the corpus confirms with its debut pitch at the TV Upfronts competing against major networks and its Retail Ad Service placing ads on other retailers' own sites.
- Retail media consolidates around whoever owns purchase data: Amazon's head start in hiring and infrastructure pressures every other retailer to build an equivalent ad business or rent one.
The trend: Amazon has spent the years since this office was announced converting its commerce data advantage into a full-funnel advertising platform that now competes across digital, video, and other retailers' properties.