Marketers say that Amazon's advertising business is difficult to navigate. Here's why the company thinks the 'chaotic' structure actually makes sense.
- Amazon's advertising business is growing, particularly in video advertising and measurement.
- But its ad business is spread across several teams, which can make it hard for advertisers to negotiate.
- Colleen Aubrey, global VP of performance advertising, said this structure keeps teams focused on specific products.
- See the full list of the 100 people transforming business here.
Amazon is trying to challenge Facebook and Google's dominance in digital advertising, and to that end it's been introducing ad formats like video and display.
A common complaint of advertisers is that they have to work with multiple groups in the same company, though, which can be hard to manage. Amazon's specialists who work on display and programmatic advertising don't often interact with their counterparts in search advertising, for example.
But in an interview with Business Insider, Colleen Aubrey, global VP of performance advertising, said that Amazon's advertising business is intentionally organized this way to mirror the rest of the company, with teams of specialists each focused on specific products.
"We try to organize ourselves around teams that can be thinking day and night about a particular area," she said. "From outside Amazon, I can see why it can be hard to organize us into nice, clean boxes, but what we're doing is trying to balance this approach of continuing to invent quickly."
Aubrey acknowledged its model may seem "a little bit chaotic and messy" to marketers, but said she doesn't expect Amazon's organization to change.
"If we stop having this innovation, I think that would be a problem," she said.
Advertising is a small but growing part of Amazon's business. The company reported $10 billion in advertising sales in 2018 out of $233 billion in total revenue. By 2023, research firm Pivotal Research expects Amazon's ad business to quadruple.
Amazon is becoming more flexible with advertisers
In September, Amazon consolidated its ad business to address marketers' concerns. It's since shifted some teams like video to better serve advertisers. Amazon recently rolled out new measurements to show the platform can increase brand loyalty and awareness.
It's also starting to shift its video teams to work more closely with advertisers. Agency sources said Amazon is betting big in video advertising in Amazon Prime, Amazon Fire and IMDB and creating custom ad packages for advertisers.
Aubrey said advertisers should take the moves as signs that Amazon's ad business is maturing.
"When we have things that create that value, we move those products into more stable and mature businesses that are easier for marketers to put into clean boxes," she said.