- Amazon has the third-largest advertising business after Google and Facebook.
- As Amazon's ad business grows, a number of third-party tech companies and agencies have emerged to help marketers navigate the e-commerce giant.
- Business Insider identified 18 of the most important ones that help marketers run ads and help sellers manage their e-commerce strategies and logistics.
- Click here for more BI Prime stories.
A new crop of companies wants to cash in on Amazon.
The e-commerce giant's advertising business is expected to make $17 billion this year, according to financial services firm Cowen. Its advertising business is more nascent than Facebook or Google, but it's fared better than its rivals during the coronavirus as more people shop online and performance-heavy advertisers increase spending on the platform.
Amazon's growing advertising business has spawned a cottage industry of tech firms and agencies that specialize in Amazon. They help advertisers and sellers solve challenges including deciding what products to sell online, how to get products noticed, and running advertising campaigns that drive sales.
Business Insider identified 18 companies that are cornering the Amazon market, based on their reputations and clients and what problems they're trying to solve. Many of the companies we highlighted are founded by ex-Amazon employees and enterpreneurs who started their own firms to help others master the platform.
Here are the companies, listed in alphabetical order.
Blue Wheel Media: An agency that gives sellers first-hand experience
Trevor George founded Blue Wheel Media as a digital ad agency after selling products on Amazon himself. He also runs Trevco, which is his family's company and a third-party marketplace that sells sells licensed apparel and accessories.
He launched the agency as a way to help other sellers understand how to get their products discovered and reviewed as well as run ad campaigns for brands like Moroccanoil and Tushy.
Blue Wheel Media also runs campaigns on Facebook, Google, and Twitter.
Bobsled Marketing: An agency aimed at at e-commerce brands trying to grow sales
Bobsled Marketing is an Amazon-focused ad agency founded by Kiri Masters, a former banker at JPMorgan Chase.
The 26-person agency differentiates itself with regular news roundups and webinars about Amazon that Masters organizes for clients. The firm is a mix of a managed-service shop that handles accounts and ad campaigns for third-party sellers and a consultancy that helps clients like Project Sunscreen and Barcel develop e-commerce strategies.
ChannelAdvisor: A software company that focuses on e-commerce businesses
ChannelAdvisor is a platform used by brands like Party City and Asics to manage their sales, marketing, and fulfillment across Amazon, eBay, and Walmart.
The 19-year-old firm helps brands price items, manage their inventory, and access analytics. A forecasting tool predicts how much inventory to stock and another feature tracks profitability metrics.
Advertisers also use ChannelAdvisor's technology to bid, tweak, and schedule ad campaigns across three of Amazon's popular ad formats on its website and app: Sponsored Products, Sponsored Display, and Sponsored Brands.
Spitz was formerly president and chief operating officer at the firm before being named CEO in 2015. Before ChannelAdvisor, he founded a mobile marketing firm called Avesair and is on the board of directors at digital advertising company AdWerx.
Channel Bakers: An agency that focuses on advertising campaigns
Joshua Kreitzer founded Channel Bakers after working in e-commerce at brands like GoPro and Corsair.
The firm is a full-service Amazon agency that helps brands including Wandering Bear, Samsung, and Intel advertise on Amazon with search and programmatic ads as well as over-the-top ads in Amazon's TV properties. Channel Bakers also works on non-advertising products like merchandising and creating content for product pages and Stores, which are branded sections of Amazon that marketers can use to highlight products.
Channel Bakers also creates and manages e-commerce strategies for Walmart, Rakuten, and Sears.
Downstream: A software firm that uses AI to run ad campaigns
Downstream CEO Connor Folley is an ex-Amazon marketing manager who worked with consumer-electronics brands before founding his own startup three years ago to tackle the problem of automating the manual process of buying Amazon ads.
The company sells technology that brands like HP and Bic use to tweak campaigns and track metrics like cost and clicks of campaigns that measure brands' return on ad spend. Downstream's software also stores advertisers' data and has a recommendation engine that gives advertisers insight into their competitors.
Downstream has raised $4 million in funding from Haystack, Founders' Co-op, and MathCapital and was part of Techstars Seattle Accelerator, an organization that provides mentorship and resources to startups, in 2018.
Envisions Horizons: An agency aimed at beauty and wellness brands
Laura Meyer is a former Amazon Advertising sales executive who founded her own firm to specialize on beauty, wellness and parenting brands.
Beauty brands have historically been more resilient to e-commerce because most of their sales are done in physical retail stores, but Amazon is pushing into beauty because of the category's high profit margins. Meyer helps clients like Thinx and Milani Cosmetics design product pages and advertising campaigns to drive conversions.
The firm's services include strategies and insights about Amazon, content creation, and advertising campaigns.
FlyWheel Digital: An agency that built its own adtech
Patrick Miller and Chip DiPaula cofounded Flywheel Digital in 2014 to help big brands like Purina, Energizer, and Crayola run ad campaigns on Amazon, Walmart, Home Depot and Kroger's properties. It sold the firm to holding company Ascential for $60 million in 2018.
The agency has built its own adtech rather than work with third parties to run and optimize ad campaigns. The firm consults with brands on topics like the supply chain and builds out models to predict metrics like sell-through rate and purchase order for brands selling on Amazon.
Flywheel Digital is also one of the four firms plugged into Walmart's self-serve ad platform.
Before founding Flywheel Digital, Miller worked at Compass Marketing, a Maryland-based consultancy that focuses on packaged goods.
Kaspien: A software company that seeks to help third-party sellers
Amazon's marketplace is broken into first-party sellers that sell inventory directly to Amazon and third-party sellers that use Amazon to sell to consumers.
Kaspien, which was formerly ETailz, is squarely focused on third-party sellers that struggle to work directly with Amazon. The firm sells software that helps with sales and handles inventory management and marketing on Amazon, Walmart, and eBay for brands including Strider and Great Lakes.
Kaspien also has an agency that provides consultancy and digital marketing work like photography and video production and managing promotions, and a retail arm that buys products from manufacturers and sells them at higher prices on Amazon.
CEO Kunal Chopra worked at Amazon and other tech companies before joining as CEO last year. He was previously a general manager at Microsoft and Amazon and has also worked at eSports company Unikrn and Groupon.
Kaspien has raised $30.2 million, including a $25 million in debt financing in February, and is owned by Kaspien Holdings, Inc.
Kenshoo: A software company that manages advertising spend for holding companies
Kenshoo is a longtime adtech firm that pioneered social ad buying through Facebook, Snapchat, and Pinterest through software. CEO Yoav Izhar-Prato is an internet entrepreneur who has raised $60 million for the firm.
The firm now focuses on search and e-commerce advertising, particularly on Amazon, Walmart and more recently Instacart. Its software helps marketers pace the speed of ad budgets and optimizes campaigns.
Amazon's ad business has long focused on performance marketing, but its made a hard push for branding dollars from big marketers and agencies. Kenshoo has deep relationships with big holding companies like WPP and Publicis Media from handling their digital ad spend for clients for years, and it's trying to grow Amazon ad budgets from holding companies that handle companies' branding dollars.
Marketplace Strategy: An agency that creates e-commerce strategies
Marketplace Strategy is an Amazon-focused agency that manages $2 billion in sales for more than 60 brands including StarKist, Utz Quality Foods, and Staples.
The company creates and designs Amazon sales strategies, runs customized analytics for clients, and handles search and programmatic advertising spend.
Marketplace Strategy was founded in 2016 and acquired by SocialCode in 2018 to build out an Amazon practice alongside S0cialCode's Facebook and Google marketing.
CEO Drew Kraemer cofounded the firm after working at digital agencies and seeing a gap for Amazon-specific e-commerce expertise.
Orca Pacific: An agency that seeks to help big manufacturers crack Amazon
Orca Pacific is a more than 50-person agency founded by former Amazon, advertising, and retail execs.
The Seattle-based firm works with manufacturers including Reebok, Mars, and Godiva to help sellers get discovered on Amazon through search tactics, content, and rating programs. Its services include designing digital stores and creating keyword strategies.
Orca Pacific also has a managed-service arm that develops Amazon advertising, promotions, and deals. A dashboard helps advertisers track ad campaign performance.
CEO John Ghiorso cofounded Seattle-based Orca Pacific 12 years ago to help brands set up e-commerce revenue as Amazon's profile grew.
Orca Pacific was acquired by Martin Sorrell's S4 Capital and merged with MightyHive.
Pacvue: A software company that sells an advertising stack to brands
Pacvue sells an advertising stack software to brands like Tuft & Needle and Duracell. The software pulls together reports and tools for managing budgets and campaigns that plugs into Vendor Central, Amazon's program that sellers use to sell wholesale products to Amazon.
The Seattle-based firm also helps brands advertise with Instacart and Walmart's self-service platforms that mimics many of Amazon's features.
Cofounder and president Melissa Burdick previously spent 10 years working at Amazon on ad products like display advertising and worked with packaged-good vendors to help them sell products online.
Podean: An agency and consultancy that plugs Amazon into bigger branding
Small sellers and marketers tend to focus on performance marketing, but Podean wants marketers to use Amazon as part of big branding and media campaigns.
Podean is an agency and consultancy that helps brands and agencies including e.l.f. Cosmetics and Mitsubishi sell and advertise on Amazon. The firm offers media-planning tools, marketplace strategy and operation management of accounts, and data consulting with Amazon's "clean room" — a data tool that analyzes metrics like attribution, reach and frequency. The company is also working on a voice search product for advertisers.
Podeon was founded by CEO Mark Power, who built an Amazon practice at ad holding company Interpublic Group's Mediabrand and held executive roles at Ansible and Reprise. Global CEO Travis Johnson joined Podeon in November after serving as president of Dentsu's Amazon practice and working at IPG agencies Ansible Mobile, UM, and Initiative.
Profitero: A software company focused on e-commerce analytics
Profitero focuses on e-commerce analytics that manufacturers like Adidas and General Mills that sell wholesale to retailers and don't have insight into the retailers and prices that their products are selling. The firm's software measures metrics like stock rates, prices, product ratings, reviews and search placements across more than 8,000 retailers — including Amazon.
Profitero is one of a handful of companies that pitches brands on its ability to crack Amazon's "black box" of data like conversions for sellers. Brands use the data to forecast e-commerce trends and set promotion strategies.
Profitero recently raised $20 million in its Series B round that was led by Scaleworks and brought on advertising veterans Bryan Wiener and Sarah Hofstetter as CEO and president, respectively. Weiner and Hofstetter were previously CEO and president at measurement firm Comscore and led advertising agency 360i together.
Seller Labs: A software company that works with sellers on reviews and advertising
Seller Labs is a software company and has made inroads with sellers and a product called Feedback Genius that solicits consumers to leave product reviews, which helps sellers build credibility and awareness on the platform.
The firm also sells advertising and marketing tools that brands like Death Wish Coffee and 5 Strands Affordable Testing use to create conversion-geared ad campaigns and manage accounts with services like product photography and digital storefronts.
In October, Seller Labs acquired software firm X-Cart to expand its work to e-commerce sites beyond Amazon.
CEO Hank Harris previously was chief financial officer and partner at technology firm Gorilla Logic.
Sellics: A software company for agencies, brands, and vendors
Sellics bills itself as a one-stop shop for Amazon, with products for agencies, sellers, and vendors.
Its software manages their presences on Amazon, tracking profit margins, inventory, and managing advertising to grow sales and run efficient ad campaigns. It also has machine-learning features that manage the advertising bids and keywords that sellers use to run ad campaigns.
Sellics handles $500 million in ad spend for brands including Brita, Bosch and agencies Rise Interactive and Beekepper Marketing. The firm raised $10 million in September from lead venture-capital firm Frog Capital.
Franz Jordan cofounded Sellics, formerly Marketplace Analytics, in 2014 as an Amazon search tool after helping a friend who was a seller on Amazon boost their rankings.
Stackline: A software company that automates Amazon advertising
According to CEO Michael Lagoni, the average e-commerce ad campaign may require up to 10,000 tweaks per day in things like budget allocation and new keywords.
Stackline's goal is to automate all of those changes for brands like General Mills and Philips. The firm sells technology that pulls together and optimizes ad campaigns from Amazon, Walmart, Instacart, and Kroger. The goal is avoid wasting money on ineffective ad campaigns and to max out every advertising dollar that marketers invest.
The firm is founded by a group of ex-Amazon employees and also offers consulting services to brands. CEO Michael Lagoni founded the firm with the goal of consolidating the multiple companies that marketers use to understand Amazon into one company.
Teikametrics: A software company that aims at helping brands sell on marketplaces
Teikametrics is a tech firm that helps brands like Clarks and Razer sell their items through Amazon's marketplace and run advertising. The software includes stats like the cost of goods sold that Amazon does not directly provide sellers.
Teikametrics is one of four adtech firms that is plugged into Walmart's advertising platform that allows brands to buy search ads on Walmart's website and app. As retailers like Walmart make a bigger push into advertising to compete with Amazon, Teikametrics wants to help brands manage their logistics and buy ads across multiple retail ad networks.
In February, the Boston-based startup raised $15 million in a venture round led by Jump Capital, bringing its total funding to $25 million. Teikametrics is working on building products that help sellers determine how much inventory to stock and how to price items with the funding. In October, Teikametrics acquired Israeli startup Adjusti.co.
CEO Alasdair McLean-Foreman founded the firm after starting an e-commerce business selling sporting goods in his college dorm room in 2001. He also created the weight loss and fitness company Traineo.
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