In 2019, Amazon acquired the ad server and dynamic creative optimization tool from the recently bankrupt Sizmek.
At the time, observers believed Amazon made the acquisition to help advertisers serve, measure, and optimize their campaigns (and to make a dent in Google’s advertising business). With the acquisition of Sizmek, Amazon was adding to the data it could collect for advertisers, the technology it used to help advertisers measure and optimize campaigns, and the talent it had on hand to battle Google.
Ultimately, the effort didn’t work out as expected, and Amazon announced that it would shutter its ad server in the fourth quarter of 2024.
This announcement raises questions of whether an ad server is even necessary anymore. You might as well ask if a phone is a necessity. You may not need your landline anymore, but you depend on your smartphone.
Why the modern ad server is like your smartphone
Ad Servers have evolved in amazing ways. The modern ad server is like an iPhone. Users depend on their smartphone in the same way that advertisers depend on their data-driven ad servers.
Today’s ad servers are not merely a transportation system to get a tag from point A to point B. They're indispensable technology for unlocking improved ad performance, increasing ROI, and gaining a unified view of your total marketing efforts.
The modern ad server is a command center. With an ad server, your campaigns sit on an immense reserve of data that can fuel personalization, immediately measure performance, and automate optimization to drive ROI.
Ad servers provide a pathway to transforming everyday advertising into direct value for your business outcomes and ultimately brand growth. Choosing to ignore the benefits is like deciding to ditch your smartphone.
A history of tech giants challenging Google’s ad server
Because ad servers in their modern form have become so crucial to advertisers, why is it a massive undertaking to create a worthy challenger to Google’s ad server? There’s history here. Amazon is not the first tech giant to walk away from the ad server business. Here's some background:
- Facebook shrugs off Atlas. In 2013, Facebook acquired the Atlas Advertiser Suite from Microsoft. The press speculated that Facebook had two key goals with the acquisition of this ad server: proving the value of Facebook advertising, especially on mobile, and to building an ad network to rival Google’s. Facebook shut down Atlas in 2016.
- Microsoft’s Atlas fails to launch. Microsoft acquired aQuantative and its ad server, Atlas, in 2007 for $6.3 billion. By 2012 Microsoft had written off the acquisition as essentially worthless. The software giant completely abandoned its focus at the time when it sold Atlas to Facebook in 2013.
Is Amazon Conflicted?
Amazon is clearly investing heavily in their video business, and as such, is focused on building Prime Video, investing in Thursday Night Football, building their Ads business in Prime Video in 2024. We believe that Amazon has proactively taken the approach to focus on content and not introduce the inherent conflict in both running a media business and managing the technology for brands to serve ads into their own inventory.
It is the same reason other previous players in the ad server market have not passed the independence test.
It’s very hard for a company to remain independent, neutral and free of bias, while building technology that can enable brands to spend money effectively on your competitors at the same time. The hallmark of a truly independent platform is making the best decisions on behalf of the customer, while ensuring transparency and trust as a neutral third party.
Microsoft, Facebook, and Amazon all now removed the ad server from their quiver in their battles with Google’s ad business.
This could go a long way in explaining why the U.S. Department of Justice is pursuing an antitrust case against Google’s search and search advertising business and something that Amazon may have decided proactively to not suffer the same potential fate and increased DOJ scrutiny.
If Google remains king of the ad server hill, what are the ramifications?
Will Google be tempted to reduce investment in advancing its technology and in delivering metrics and insights to its advertisers? Or, in light of Google’s decision to walk away from the Media Rating Council, will advertisers lose transparency into the metrics that Google’s CM360 provides? Tied to its own media offerings, how problematic is it that Google may be now “grading its own homework”?
Innovid’s ad server thrives
Here’s why we continue to succeed:
- Focus. Our sole business is helping cross-channel advertising campaigns succeed for brands, agencies, and publishers. This focus means that all we think about as a company is how we can serve ads more efficiently, personalize for more relevancy, measure campaigns more effectively, and optimize to deliver more ROI.
- Independence. Innovid’s independence is our superpower. We do not buy or sell media. Our commitment is to the brands, agencies, and publishers we serve. There is zero incentive for us to bolster our own ad business, because we don’t have one. We are in business solely to support the effectiveness of advertising campaigns no matter where they run.
- Technology. Because of our neutrality, we build our technology to work for everyone in the advertising ecosystem across linear, connected TV and digital channels. The mission of our technology is clear, so it makes it easier for our talented people to build a product that works across the entire industry.
- Service. Innovid offers flexibility that includes access to our highly trained customer service team that ensures you get the most out of our ad server and self-service options for brands and agencies that want to remain hands on keyboard.
It is an exciting time to be in this business as ad servers continue to evolve beyond counting clicks and impressions to providing the personalization, measurement, and optimization tools to help ad campaigns perform at the highest levels. With our focus, independence, and technology, we plan to be around helping our customers produce effective advertising for a long time to come.