The most prominent Sizmek news of 2019 has surely been its partial acquisition by ecommerce giant Amazon.
In the press release published in May, 2019 Amazon confirmed that it has acquired Sizmek’s ad server and DCO (or dynamic creative optimization) solution.
However, none of the organizations has disclosed the deal’s financial terms. What they informed is that Sizmek’s DCO and ad server would keep operating separately even after this takeover.
The press release said that Amazon Advertising and Sizmek have several mutual customers, a fact that has allowed the ecommerce biggie to comprehend how valuable these two segments of the companies are for their consumers.
Amazon’s release also informed that Sizmek was looking for a suitable buyer for both their DCO and Ad Server and now that the takeover has taken place both the companies are committed to offering continuous service to their customers maintaining the high standards they expect.
What Lead to the Amazon Sizmek Acquisition?
Bloomberg was one of the first news portals to announce amazon’s plan of acquiring a part of Sizmek. A Bloomberg report (Source) on Amazon’s chances of taking over Sizmek’s ad serving technology was published a couple of weeks prior to Amazon’s official press release was published.
The Bloomberg report stated that Amazon is planning to buy Sizmek’s ad server most likely for offering stiffer competition to Google, particularly the search engine giant’s marketing platform Google Marketing Platform (formerly known as DoubleClick).
Sizmek’s ad serving tech would allow Amazon manage its online ad campaigns more efficiently on the backend while bolstering its credibility among marketers who associate Amazon primarily with ecommerce and not so much with advertising.
Sizmek has been looking for a takeover almost since the beginning of 2019, particularly since the time of filing for Chapter 1 bankruptcy in March. Initially, the company claimed that its total worth might range between $100 million and $500 million.
The first acquisition took place in April 2019 when data marketing company Zeta Global acquired Sizmek’s digital ad marketplace. Zeta Global spent $36 million for this acquisition.
This was followed by the Amazon deal.
Why did Amazon Decide to Take Over an Ad Server?
The last few years have seen Amazon become a big name even in the advertising industry. However, in spite of the meteoric growth this Seattle-based group has not yet managed to compete vehemently with the duopoly of Facebook and Google.
Analysts are predicting that the scenario would change in the coming years. Acquisition of Sizmek’s advertising technology seems to be a big step in that direction.
Experts also believe that this acquisition by Amazon is a serious blow for Google. For those who don’t know, the Seattle-based firm competes much more fiercely with Google than Facebook as far as key marketing channels (for example, advertising of packaged goods) are concerned.
This rivalry between Amazon, Amazon Sizmek to be more precise, and Google is all set to become sterner as Facebook is currently focusing primarily on its private, encrypted messaging technology while the ecommerce giant and search engine biggie are fighting hard to get stronger grasp in the advertising sector.