Amazon to boost advertising business with acquisition of assets from ad tech company Sizmek

(GeekWire Photo)

Amazon has acquired parts of a global ad tech company to bolster its rapidly growing advertising business.

Amazon said Friday it agreed to acquire Sizmek’s Ad Server and its Dynamic Creative Optimization tool, which helps personalize ads using data. Amazon said in a press release the two companies have a lot of customers in common, “so we know how valued these proven solutions are to their customer base.”

Amazon representatives declined to disclose terms of the deal.

Sizmek filed for bankruptcy in March, and it has been looking for a buyer for the Ad Server and Dynamic Creative Optimization tools as part of an overarching attempt to “find a solution for our remaining businesses,” the company wrote in a note to clients on its website. Sizmek will continue operating as a standalone entity “for the time being” and will be separate from Amazon Advertising.

Advertising is quickly becoming one of Amazon’s most lucrative businesses, in addition to its e-commerce engine and cloud computing arm. However, advertising doesn’t have its own category in the company’s earnings reports and is listed under a category called “Other.” That category brought in $2.7 billion in revenue in the first quarter, up 34 percent over a year ago.

Advertising drives a majority of revenue for fellow tech giants including Google and Facebook, which charge advertisers to have their marketing content appear on search results and news feeds. Amazon employs a similar strategy, but instead with its online marketplace and other platforms, giving vendors, authors, and others ways to reach potential customers. One of Amazon’s main competitive advantages as it gears up to challenge the dominant digital advertising players Google and Facebook is the data it has on purchasing habits.