Google and Facebook have dominated the digital advertising landscape for much of this decade. But in the past year, a new entrant has emerged to disrupt the digital ad duopoly: Amazon.

Amazon’s revenue from advertising has skyrocketed because endemic advertisers (brands that sell products and buy ads on Amazon) have grown their Amazon ad budgets significantly over the past two years. And non-endemic advertisers (brands that don’t sell products on Amazon but buy ads using Amazon’s ad stack) are finding value in using Amazon’s rich behavioral and purchase-level data for more granular ad targeting.

So we, and many of our clients, have been wondering: What does this all mean for the ad industry? Will Amazon steal significant share away from Google and Facebook? Who will be the winners and losers? We investigated and produced a brand-new piece of research inspecting how Amazon will disrupt and change the ad ecosystem.

The report looks into Amazon’s impact on:

  • The duopoly. Google and Facebook have comfortably controlled most digital ad dollars to date, but now that’s at risk of changing. The duopoly can expect steeper demands by clients and even more competition (beyond Amazon) as the triopoly emerges.
  • Agencies. Ad agencies should be excited — like marketers — for added competition to the digital ad landscape. But our advice: Don’t get excited too quickly. Agencies cannot and should not treat Amazon as just another ad channel because of its status both as an eCommerce platform and a media platform. Brands that sell on Amazon require a deeper level of support for it, such as operations, fulfillment, pricing, and merchandising, as well as buying ads.
  • Adtech. Inevitably, adtech will be the loser in this evolution of three major ad platforms. Why? Because Amazon will continue to go after many of the point-solution adtech vendors, and there will be further consolidation of the adtech landscape. Amazon’s acquisition of Sizmek (finalized in June) is just the beginning of it putting together a full ad stack.
  • Marketers. Most importantly, we look at how Amazon will affect the way marketers make budgeting decisions when considering their media plans. And we recommend that marketers take a long view when considering how to invest in Amazon as an ad platform.

For the details on all of this, take a look at the full report and reach out to me with questions, comments, or ideas. The ad ecosystem is ever-evolving, but with Amazon’s growth, it will be shifting even faster.