Amazon will shutter its ad-serving business in the fourth quarter of 2024, the company announced Tuesday.
The delay is intended to give brands and agencies extra time to transition business to another ad server, as well as support employees worldwide who might be affected by the decision.
“At Amazon, we are always evaluating the potential of our products and services to deliver value for customers, and we regularly make adjustments based on those assessments,” an Amazon spokesperson said.
Amazon Ad Server is an optional service for its advertisers and is used to build and distribute creatives and measure campaigns across multiple demand-side platforms and publishers, including Amazon sites.
The company believes there is a strong future for it in advertising as its business continues to grow at a rapid pace, and will continue to invest in building a complete advertising-technology infrastructure that gives marketers greater insight into the effectiveness of campaigns.
Amazon generated $10.68 billion from its advertising-services business in the second quarter of 2023 -- up 22% from a year ago.
The spokesperson said Amazon Ads also supports other certified 3P ad servers.
Other Amazon advertising services will continue, with services such as Amazon DSP that enable advertisers to programmatically buy display, video and audio ads to reach audiences on Amazon as well as across thousands of third-party apps and websites.
Amazon Marketing Cloud -- a clean room -- will continue to allow advertisers to run custom audience and campaign analytics across a range of first- and third-party inputs. It is a secure and privacy-safe digital environment.
Amazon Publisher Services will continue to help publishers maximize advertising earnings through one, cloud-based header-bidding integration.
Amazon Ads and third-party ad buyers bid on inventory programmatically via a unified, first-price auction in which the highest bid always wins, and publishers always receive 100% of the winning bid amount.
Amazon acquired the Sizmek Ad Suite, consisting of an ad server and dynamic creative optimization tool, in May 2019. Sizmek Ad Server and Sizmek DCO initially operated separately from Amazon Ads.
The company transitioned and renamed the suite Amazon Ad Server earlier this year, adding expanded capabilities and features intended to make the execution of cross-channel campaigns easier and more effective.
The hope was that the acquisition of Sizmek’s ad server would provide brands and agencies with more data to improve the ability to measure and attribute the performance of campaigns bought through Amazon.
Amazon will continue to support Amazon Ad Server DCO features until the fourth quarter of 2024.
Campaigns that run using the Amazon DSP or sponsored ads programs also benefit from creative optimization. The company said it will continue to enhance these capabilities.
The demand-side platform (DSP) -- part of the Sizmek deal -- went to Zeta Global Holdings, a marketing-technology and cloud-software company co-founded by former Apple CEO John Sculley.
It is difficult to determine the reason for the shutdown for the server and the inability for it to gain traction. Certain regulatory requirements of privacy policies could have been contributing factors. It could simply be that ad serving is not the technology Amazon wishes to continue to invest in -- deciding to put more focus on artificial intelligence (AI) and machine learning. However, these reasons are pure speculation.