Member Exclusive   //   February 1, 2024

Amazon Briefing: As retail media advertising becomes more robust, agencies move upstream

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

The role of the Amazon agency is evolving, and it’s no longer living in its own e-commerce vacuum.

A few recent agency moves highlight this shift. Digital marketing agency Acadia, is now focusing on pitching itself as an agency of record for bigger brands, rather than just a boutique Amazon player. Its latest client is European Wax Center, which is using the agency for all of its Amazon, search and paid media work. It follows a trend from other agencies. Last year, Fortress Brand Group renamed itself Front Row as part of an agency acquisition spree to position itself as a more unified commerce service.

For agency heads, it’s a distinct strategic shift in the offerings they sell. “My biggest thesis is that a lot of money is trapped on retail island,” said Jared Belsky, co-founder and CEO of Acadia. “For most clients, retail media is its own thing.” That is, brands have a bifurcated marketing budget — one focused primarily on top-of-funnel awareness plays, the other on more direct retail-media campaigns on platforms like Amazon and Walmart.

Acadia, for example, has long focused on retail media platforms as a niche to reel in brands. But now more clients are trying to account for other marketing campaigns and channels (that usually have their own associated agencies) — like search, TV and social media — and having them all work in concert with each other more seamlessly. As such, agencies are widening their lenses in the hopes of getting bigger clients, with deeper pockets.

“Having one agency to really focus in on our business really allows them to dive in and understand our audiences,” said Carly Tietzer, European Wax Center’s vp of marketing. “How they all work together, how the audience is in the different platforms, how they can maximize the different platforms.”

The advertising landscape has changed a great deal — much of it due to Amazon. While the e-commerce platform is most known as a marketplace to buy things, Amazon has been expanding its advertising prowess beyond its own walls. Namely, Amazon’s DSP has allowed brands to advertise on other web properties and the company’s ever-expanding video offerings give advertisers the ability to produce flashy placements during primetime TV.

“Bottom of funnel and top of funnel are continuing to mesh,” said Tietzer. In her estimation, it started many years back with social media. “Is it top of funnel or bottom of funnel? Where does that play? Where is your consume in their journey?” But retail media developments — such as Amazon’s TV play — make the waters even muddier.

And for the agencies themselves, it marks an interesting twist. Acadia itself launched in 2021 primarily as a retail media agency. Over the years it acquired a number of other smaller players that focused on specific areas like Amazon and Google, and is now trying to convince brands that it can help lead entire marketing budgets. “We can be that modern [agency of record],” Belsky said.

Front Row has followed a similar trajectory. “We realized that there is a lot of interdependency between what you’re doing off of Amazon and what you’re doing on Amazon,” said CEO Yuriy Boykiv. Before, marketing teams — as well as adjacent agencies — lived in siloes. “There was a social media agency, an Amazon agency,” Boykiv said.

But more and more those aspects are merging. “We’ve seen a tremendous lift on clients’ Amazon sales once we started doing some of their social work,” said Boykiv. For example, Front Row recent performed a study and found that whenever one of its clients went viral on TikTok there was a “significant correlation… to the sales on Amazon or”

As such, Front Row’s thesis was to acquire other agencies in specialized areas — namely, social media, Amazon and commerce — and then sell one service to clients that represents it all.

That’s a nearly identical business model to what Acadia is doing for the European Wax Center. “There are 10,000 of what I call performance bro shops slinging bids on Meta,” said Belsky. But he believes agencies should focus on bridging the upstream from the downstream — “Google experts, Shopify experts, Meta experts,” he said. “Media has gotten harder not easier.”

In many ways, it’s a sign of the precarious times. The shift in the ways agencies pitch themselves is happening while the economy remains shaky and layoffs continue to hamper many industries. As such, these marketing shops are trying to prove they can offer more than just help with listing products on a popular marketplace.

“I think that the agency offerings have moved more upstream to the higher-value type of service and consulting,” said Jon Derkits, partner at The Master Agency. “CMO-like activities, those are part and parcel to what we provide to clients.”

According to Derkits, the economic uncertainty is likely what is behind this agency shift. “As we moved from a 0% interest rate environment to a 5% interest rate environment, these brands have to be sustainable in their own right,” he said. “A lot of what we do for clients is not chatting growth but chasing efficiencies.” That is, brands are looking for marketing services that can take more zoomed-out and holistic looks at entire budgets and be able to start and stop different levers when needed.

“The better agencies can, like a chameleon, map to their clients’ changing goals,” said Derkits.

As Acadia’s Belsky sees it, agencies are increasingly focusing on driving an entire business’s growth and not just a specific channel. “The [marketing] money needs to flow to drive growth and shareholder value,” he said.

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