Amazon has taken a significant step in reshaping its media strategy by forging new partnerships with WPP and Omnicom Media Group (OMG) for global media management.

This decision follows a year-long search process initiated by Amazon, which was first reported in September of last year. WPP will handle media responsibilities across the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions, while OMG will manage the media accounts for the Americas.

The shift in media partnerships marks the end of Amazon's long-standing relationship with IPG Mediabrands, which had overseen Amazon’s media business since 2013. Despite losing the media account, IPG will continue managing media duties for Amazon Web Services (AWS), Amazon Ads, and Amazon Business. This strategic move reflects Amazon’s continuous drive to optimize its advertising operations and build stronger relationships with global media agencies capable of handling its vast and growing media footprint.

In 2023, Amazon reported spending a staggering $20.3 billion on advertising and promotional costs globally, according to its annual report. This significant expenditure highlights the e-commerce giant's ongoing commitment to scaling its operations and enhancing its media presence across different markets. The new partnership with WPP and OMG aims to ensure that Amazon’s media strategy is aligned with the evolving landscape of digital advertising, allowing the company to tap into the expertise and extensive networks of these leading global agencies.

The collaboration with WPP and OMG also allows Amazon to leverage their capabilities in data analytics, programmatic advertising, and media buying across multiple regions. The goal is to create more cohesive and efficient global media campaigns that resonate with consumers in key markets. Amazon’s spokesperson, Margaret Callahan, expressed gratitude for the past decade of partnership with IPG, stating, “We appreciate the discussions with all the world-class agencies we met during our search. We particularly want to thank IPG, who has been a fantastic partner over the last 10+ years, and we’re grateful for all their work and continued partnership for the other significant areas of our advertising business, including AWS, Amazon Ads, and Amazon Business.”

Amazon’s Media and Advertising Strategy for 2024

The partnerships with WPP and OMG are part of Amazon's broader advertising strategy for 2024, which focuses on expanding its media reach and driving brand engagement across global markets. As Amazon continues to lead in the e-commerce space, its advertising arm is becoming an increasingly important revenue driver. Amazon’s digital advertising services have grown rapidly over the past few years, positioning the company as a formidable competitor in the ad tech industry alongside Google and Meta.

This new media strategy involves not only managing Amazon’s vast advertising budget but also maximizing its advertising reach through innovative campaigns, better use of customer data, and more strategic media buying across digital platforms, television, and emerging channels like connected TV and streaming services. With WPP and OMG handling these operations, Amazon is set to further cement its place in the global advertising ecosystem.

The move reflects a growing trend of Big Tech companies partnering with global media agencies to streamline their marketing efforts and tap into new opportunities. By bringing in WPP and OMG, Amazon ensures it can continue to optimize its media spending while staying ahead of trends like programmatic advertising, personalization, and the increasing role of AI in media buying and advertising analytics.

Financial Impact of Amazon’s Advertising Spend

Amazon’s massive $20.3 billion ad spend reflects its dominance in not only retail but also digital media. The company has been aggressively expanding its advertising services, offering brands and sellers access to advanced tools to target consumers across various touchpoints. This ad spend includes costs associated with promoting Amazon's own products and services, as well as advertising solutions it offers to other businesses on its marketplace and platforms.

The new partnerships will likely allow Amazon to fine-tune its media planning, execution, and reporting, driving better ROI across its ad campaigns. This aligns with the company's vision of creating seamless, integrated marketing strategies across global markets. Both WPP and OMG bring expertise in data-driven marketing, customer behavior analysis, and multi-channel campaign execution, which will play a key role in Amazon’s strategy to reach more consumers in an increasingly fragmented media landscape.

Looking Ahead: What to Expect

As Amazon continues to diversify its business beyond e-commerce, we can expect its advertising and media arm to play an even more significant role in its overall growth strategy. With WPP and OMG at the helm of its media operations in key regions, Amazon will be better positioned to expand its influence in new territories and drive more effective media campaigns.

Given the rise of programmatic advertising and advanced data targeting, Amazon is set to capitalize on these trends, offering more personalized and efficient ad solutions for its partners. Furthermore, with digital channels like streaming services, social media advertising, and influencer marketing becoming integral parts of the advertising mix, Amazon's media strategy is bound to evolve, taking advantage of new technologies and trends to stay ahead of the competition.