On May 31st, Amazon confirmed that they had agreed to acquire Sizmek’s Ad Server and Dynamic Creative Optimization (DCO) platform. This agreement concluded months of speculation following Sizmek declaring bankruptcy in March and selling off their demand-side platform in April.
The retail giant rationalised their decision by explaining that the two companies have a similar customer base and a mutual understanding of the value of these proven solutions. However, one week later Weborama’s parent company, Ycor, decided to top Amazon’s bid, promising to build an independent adtech solution that would be free from walled garden connections. Now, Ycor have confirmed that they are back out of the running, following a higher bid offered by Amazon last weekend. Although no official disclosure of the final price has been given, the chief executive of Weborama stated that “The fight is immensely imbalanced given how incommensurate Amazon’s resources are.”
The buyout will put Amazon in a better position to compete with Google and Facebook for advertiser budgets, bolstering their ever-growing advertising business. Amazon’s acquisition of Sizmek signals the major changes that the advertising market will face in the future, with some even suggesting that this deal marks the end of the duoply and the beginning of the triopoly. Sizmek’s technology will enable them to provide advertisers with a way that they can improve targeting, reach additional consumers and self-create ads. The technology will also enable them to better track data for ads served by businesses that sell on Amazon, starting from the ad right up to the point of purchase.
For now, we know that Sizmek’s ad server and DCO will continue to operate independently from Amazon Advertising. However, it is likely that in the future, Amazon Advertising will merge with Sizmek’s technology in order to deliver a fully integrated digital ad offering inclusive of features that their competitors do not currently offer. In April, we posted a blog about Sizmek filing for bankruptcy which you can read here. In this post, we discussed how Sizmek owed a reported $172 million to the ecosystem. So far, there is no evidence to suggest whether the acquisition will result in the loss of revenue being returned to those affected.
Since this article was posted, it has been confirmed that Amazon has acquired Sizmek’s Ad Server and DCO platform.