The common refrain in ad tech is that Google and Facebook are the duopoly, and maybe Snap or some other up-and-comer has the potential to join them. Google, after all, knows everything you've searched for - and can tie that to your identity across all your devices. Facebook knows what you tend to like and your demographics - again across all devices. Both have parlayed this into very effective ways for marketers to advertise products. But standing right with them in terms of data quality is Amazon, which accounts for nearly half of all ecommerce in the US almost 20% in the UK. Amazon knows what you've purchased, when you've purchased it, and exactly what sort of customer you tend to be.
Historically, Amazon has not done much with this information from an advertising perspective. They are now moving increasingly aggressively to increase their ad tech footprint. This comes on a few different fronts:
DSP: The Amazon Ad Platform (AAP) is the company's proprietary DSP. This has the unique capability to target data segments of Amazon users across the web (and app, video, native, etc). In a somewhat unexpected turn, this sleeping giant has grown to become the single most-used DSP by programmatic marketers (beating even DBM) - with a 60/40 split between agencies and brands. This was a major revelation because previous version of the same study didn't even bother to include AAP (40% used AAP v 36% using DBM - everyone else was more than 10 points lower). It should be noted that broad adoption doesn't necessarily mean the same level of spend (The Trade Desk got nearly 0% among brands themselves, so fared relatively poorly, even though it's a huge source of spend). Amazon continues to invest in AAP, and as their ecommerce position improves, and as they become the only company to truly know the conversion data for users that buy on Amazon, it is expected that their ability drive performance will increase substantially. This is a huge threat to Criteo in particular, but also to any company that optimizes on CPA - only Amazon will know any conversions on their platform.
Commerce: An increasing percent of total commerce flows through Amazon. For a long time, Amazon resisted participating in Google's product listing ads (the ads at the top of a google search when you look for a product) - in large part because they wanted people to simply come to Amazon when they wanted to search for products, and thus cut Google out of shopping entirely. While Amazon is now treading gently into PLAs, this default-to-Amazon search behavior has become the norm for at least 55% of shoppers. While Alibaba (a Chinese Amazon-ish) makes much of its revenue from search advertising. Amazon does not optimize this nearly as much as it could (there are some search ads, but not all that many, and the results aren't optimized for advertising). That said, it's not clear that Amazon wants to change this much. Roughly half of all items sold on Amazon are sold by 3rd parties - and Fulfillment by Amazon (FBA) is the largest driver of growth here. Amazon takes between 14 - 40% for third-parties using FBA, meaning there may or may not be a huge area of ecommerce growth. There is also the Amazon Media Group, which generally handles ads on Amazon.
Header Bidding: Amazon Publisher Services (APS) is the company's SSP / header bidding offering. This is a cloud-based server-side header bidding solution. Amazon is using this to develop more direct relationships with publishers and provide AAP with as much access at as low a cost as possible. See here for more: Amazon's Header Bidding
Owned inventory: Amazon purchased Twitch a few years ago for roughly $1B. Twitch has 100M users and 10M daily active users - and is by far the largest streaming e-gaming site, which is a very rapidly growing category. Amazon has also created Amazon Lumberyard, which is a game engine for developers to build tier 1 games upon, and which is tightly integrated into AWS and Twitch. As the category of e-gaming increases, Amazon will benefit through Twitch generally growing and by an increasing number of games being built on Lumberyard and having Twitch streaming directly built-in. This creates a huge pool of monetizable video inventory for Amazon. Amazon also has traditional ad inventory on amazon.com that it sells both through AAP and through its managed service arm.
Overall, Amazon is currently about 1/15 the size of Facebook, and roughly 1/40 the size of Google in terms of ad dollars (making Amazon slightly larger than Snapchat). The company has something of a monopoly on on-Amazon conversion data, as well as overall e-commerce data. As the company increases its share of e-commerce, this data will become a "walled garden" of its own. We do expect Amazon to be a significant force in the future, and will likely double its business every couple years for a while.