Amazon Consolidates Its $1 Billion-Plus Global Media Buying Business With IPG Mediabrands

Publicis competed in the final round of the review

The ecommerce giant spent nearly $1 billion on U.S. measured media last year. Getty Images
Headshot of Patrick Coffee

After launching a review this summer, Amazon is consolidating its global media planning and buying duties with the IPG Mediabrands network, according to three people close to the matter. An internal memo went out to staff this afternoon. The winning team will promote Amazon’s ecommerce hub, assorted tech products and Prime subscription service around the world.

The review’s final round saw a Publicis Media conglomerate face off against a “holistic solution” group consisting of teams drawn from multiple IPG agencies including Initiative.

Initiative beat out WPP’s Mindshare to win the global business in 2013, with MEC retaining digital buying duties in the U.S. A spokesperson for MEC said the agency was not involved in this latest review but declined to elaborate on the larger GroupM organization’s relationship with Amazon, which has also included media work in the Asia-Pacific region.

Another source indicated that Amazon’s NDAs were so strict that some executives within the holding groups’ respective media networks did not know which members of their own teams were involved in the pitch.

Representatives for Publicis Media agencies Starcom, Spark Foundry, Zenith and Blue 449 have either declined to comment or not responded to related queries. But all sources who spoke with Adweek about the review confirmed that Publicis was a finalist, and a party who visited Amazon’s New York headquarters in August noted a standard “Welcome Publicis Media” sign in the lobby.

Spokespeople for Initiative and IPG deferred to the client for comment. Adweek has reached out to several people in Amazon’s communications department, none of whom have responded to multiple emails.

The precise composition of the Publicis and IPG teams is unclear, and it is also not clear whether these two were the only agencies involved in the formal review. Sources who first confirmed the news in July indicated that the ecommerce giant included most of the major holding groups on its initial RFP. One notable exception was Omnicom Media Group. It could not participate due to contracts with Google, which competes directly with Amazon in voice, smart home and other categories.

The news comes as marketers and analysts increasingly see Amazon as the third wing of a new digital media trifecta led by Google and Facebook. Jeff Bezos’ company now brings in approximately $1.12 billion each year in ad sales, which is only a fraction of Google parent Alphabet’s $24 billion total and Facebook’s $9 billion haul. But according to recent research from Merkle, sponsored products ads, which account for approximately 82 percent of Amazon’s total sales, grew more than 50 percent between the second and third quarters of 2017. The company’s most recent quarterly earnings call stated that its overall advertising business has grown 58 percent year over year.

In early 2017, Omnicom CEO John Wren expressed skepticism in Amazon’s ability to compete directly with Google in the near future. Yet WPP CEO Martin Sorrell has repeatedly emphasized its importance in the digital advertising ecosystem, going as far as to acquire the Amazon-only consultancy Marketplace Ignition and combine it with Possible to launch a new offering tailored to specific products and services like Prime, Dash and Alexa.

In September, the company announced plans to open a new 359,000-square-foot office on Manhattan’s West Side. That location will serve as the center of its global advertising business, and a statement from New York Gov. Andrew Cuomo indicated that the move will create 2,000 high-paying jobs.

According to the latest numbers from Kantar Media, Amazon spent more than $950 million on measured media in the U.S. in 2016, a number that has nearly doubled over the past four years. Multiple analysts estimate the company’s annual global budget easily exceeds $1 billion.

@PatrickCoffee Patrick Coffee is a senior editor for Adweek.