Amazon to Purchase Sizmek: The Implications of a Stronger FANG

By Thought Leaders Archives
Cover image for  article: Amazon to Purchase Sizmek:  The Implications of a Stronger FANG

Amazon confirmed their plans to acquire what was left of the Sizmek asset after Zeta Global bought the DSP and DMP earlier this year. The acquisition is a clear shot to the bow of Google and Facebook that we will soon see a Global Triopoly comprised of those plus Amazon.  Amazon has been making significant progress with their growing OTT and TV business, so adding ad server and dynamic creative solutions are natural additions to their stack.

Sizmek filed for bankruptcy on March 29, 2019, and has since sold off their DSP and DMP (the artist formerly known as Rocketfuel) to Zeta Global for an estimated $36 million.  The deal value for the ad serving and dynamic creative unit is rumored to be roughly $30 million.

In a statement, Amazon said that once the deal closes "Sizmek Ad Server and Sizmek DCO (Sizmek Dynamic Creative Optimization) will operate separately from Amazon Advertising for the time being.  We look forward to working with the team, and we'll share more updates as we invent and create new opportunities to better serve our advertisers over time."

For Madison Avenue, this should be encouraging that we have more competition in the market and less reliance on the Google/Facebook duopoly.  The deal comes at a time for TV and video when Xandr with WarnerMedia and Disney/Fox are also making big moves.  Amazon has recently been making some new steps with its DSP and video solutions.

What will the impact be as we contemplate blockchain and cryptography as Adtech solutions?  Each of the three certainly can compete and have the engineering chops to deliver exciting solutions, and each has announced plans for blockchain in their own solution sets.

Amazon, along with Hyperledger, introduced Amazon Managed Blockchain, Google announced a Google Cloud Blockchain solution and Facebook has been talking blockchain since Zuck's yearend open letter but has most recently been rumored to be creating a new Facebook currency using blockchain after placing a highly regarded insider in charge of their blockchain initiatives.

Amazon appears to be the only one of the three with its eyes on advertising and blockchain, although Google has been working with several leading companies in our industry.  Amazon and Google are likely best positioned to capitalize on things like IPT2 with their connected devices and a possible cookie-less world.

The implications come at a time when the founding fathers of the web have their eyes set on rebuilding a free and open internet because the current one has failed, according to them.  This new DWEB (Decentralized Web) feels a little Pied Piper to me.  The work is underway, Berners-Lee has joined the multitude of others who want to ensure users have control of their own data.  Unlike some consultants who think we will move to more deterministic data models, I see a world where companies like Amazon and MadHive, for example, will co-develop a blockchain solution that values consumers' right to privacy, while at the same time permits audience-based buying.  Berners-Lee is building his version of this product on a platform called Solid, designed to allow consumers to take back control of their own data.  There are many other global projects that also have the goal of taking take back the public web.  Mastodon is decentralized Twitter.  Peertube is a decentralized alternative to YouTube.

We will be watching this closely to see what becomes of the new solution set.  FANG is becoming more and more of a reality as it relates to dominance and while Netflix has not yet announced any plans for advertising, it is only a matter of time.  One thing for sure is that the days of Google and Facebook solely dominating the web will soon come to an end.

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