WPP Agency Buys Consulting Firm That Specializes in Amazon
09 Maggio 2017 - 1:29PM
Dow Jones News
By Suzanne Vranica
Possible, a digital advertising firm owned by WPP, has acquired
Marketplace Ignition, a consulting firm that helps brands develop
their Amazon marketing and e-commerce strategies.
Based in Atlanta, Marketplace Ignition is a six-year-old
consulting firm that employs about 35 staffers and works on behalf
of companies such as Hallmark Cards and kitchenware maker Lifetime
Brands. Terms of the deal weren't disclosed.
Possible said it bought the firm to help it keep up with the
growing demand from marketers who want help navigating Amazon and
its growing advertising business.
The demand from brands seeking help dealing with the e-commerce
giant has exploded and goes far beyond retailers that have been
most affected by the rise of Amazon, said Shane Atchison,
Possible's chief executive.
"In the last 18 months, consumer packaged-goods companies have
become less fearful of channel conflict and begun to get more
aggressive at selling directly through Amazon," he said.
Although Amazon's advertising business is a fraction of Google's
and Facebook's, it is growing quickly. Marketers are buying ads on
Amazon's sites as well as using Amazon and its data to buy ads
around the web. In the past few years, Amazon has launched several
search advertising products including "Product Display Ads," which
feature product images and text related to people's searches and
direct them to Amazon product pages.
EMarketer predicts that Amazon will generate $1.81 billion in
world-wide ad revenue this year, while Google and Facebook pull in
about $73.75 billion and $36.2 billion, respectively.
In a note to investors last month, Morgan Stanley said Amazon's
ad revenue could reach $5 billion by 2018.
Ad executives have speculated for years that Amazon would
eventually challenge the tech giants' dominance in online
advertising because of the vast amounts of data it collects about
consumers, including their shopping habits and purchase histories.
As its ad revenues continue to grow, Madison Avenue is paying
closer attention.
Some executives welcome the competition. Marketers have
developed a "habit" of spending money with Google and Facebook,
said Mr. Atchison. "It's a two-horse race and we all know you need
three horses to have a marketplace. A duopoly is not good for
anybody," he added.
During WPP's earnings call in March, CEO Martin Sorrell said
"the threat to Google is clearly on search from Amazon."
But there's still a long way to go. Google is expected to have
almost 78% of the $36.6 billion U.S. search ad business this year,
while Amazon is expected to grab 2% of the market, eMarketer
estimates.
Marketplace Ignition offers clients a wide range of services,
from helping brands figure out their packing and distribution for
Amazon to creating the advertising that appears on the site. That
includes devising the right key words needed for brands to optimize
their search ads on the platform.
The company recently worked with tinfoil maker Reynolds to
create product pages that were optimized for search on Amazon, and
it also helped the brand create ads that appear on Amazon
Marketplace.
Although brands and agencies have developed deep skills sets
that help them manage Google search, Amazon's ad products are
unique to the platform and require different approaches, said Eric
Heller, CEO and founder of Marketplace Ignition. Mr. Heller said he
is selling his company to Possible in the hopes that he can scale
the business faster by having access to Possible and WPP's
clients.
Marketplace Ignition's staffers that are located in Seattle will
be moved into Possible's Seattle outpost, which has a dedicated
e-commerce practice that it started in 2013.
Write to Suzanne Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
May 09, 2017 07:14 ET (11:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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