Amazon’s move to New York shows how serious it is about advertising

Amazon’s move to New York is an indication of how serious the company may be about its burgeoning ads business — and may lead to a new talent crisis for agencies.

The Seattle-based company, which announced that New York City and Arlington, Virginia, will be its new locations this week, will invest $5 billion and open 50,000 new jobs across the two cities. This follows a new office in Manhattan that opened under a year ago that brought 2,000 jobs, mostly in advertising, to the city and closer to Madison Avenue.

The new HQ won’t be only focused on advertising — an Amazon spokesman said it will “host our natural growth as a company and will not be focused on a certain business — employees working in our new campus will be supporting all businesses.”

But it does provide some indications of how serious Amazon is about its $3 billion business, which is growing more rapidly than all of its other lines.

Amazon has made a lot of improvements in the business lately — ad buyers have reported that Amazon has consolidated and simplified its platform. On Thursday, it introduced a new agency certification program. The program asks employees to participate and showcase their abilities to complete specific courses and assessment, including sponsored ads optimization, reporting, strategy and targeting.

Jeremy Cornfeldt, president at iProspect U.S., which was one of the first “Amazon certified” agencies, said that “Amazon is very serious” when it comes to advertising. “We see first-hand how they’re evolving their products. We see they’re getting traction from a budget-growth perspective. It’s the highest growth channel they have.”

One thing that’s a little less tangible is what proximity to the metaphorical Madison Avenue really means. When Amazon’s growth in advertising began to be noticed about a year ago, the company made serious efforts to talk to agencies more — lunch-and-learns abounded, and the company grew its agency development group into hundreds of staffers, modeling it off Facebook and Google. And media, after all, is a people business — the company’s had enough complaints about a lack of “support” from Amazon from buyers, something it’s tried to solve with an increased outreach program to agencies. “Coming here is an interesting promise Amazon is making in a way,” said Cornfeldt.

Amazon has all the goods — data, targeting, attribution muscle. But multiple agency execs who asked that they speak on background said that they still want Amazon to learn their language — Amazon, said these sources, is still figuring out how to work with agencies. It’s an amorphous issue, but executives pointed to how when Google and Facebook built up their presences in New York, things changed as they got to know people. There’s a little bit of an expectation that this may happen here.

At MDC, there’s a new Amazon effectiveness capability created by its digital performance agency Unique Influence. Stella Voutsina, chief technology officer at MDC Media Partners, said that Amazon’s “vicinity to the media and marketing industry will ignite innovation,” and that she thinks she will see more startups also in the retail media space following the HQ2 announcement.

HQ2 in New York also could mean more talent flowing to Amazon. Already, a number of executives said that they’ve had programmatic specialists move over to Amazon to the Manhattan office in the past few months.

Cornfeldt said that he expects some “talent sharing” to happen with Amazon in New York. He, like other agency executives Digiday spoke to, likens to when Google and Facebook built up their ads teams in New York and plucked from the agency businesses to staff them.

Jay Haines, principal at ad recruiting firm Grace Blue, which works primarily with top agency talent, said that in the last six months, he hasn’t had a single conversation with top agency or ad talent and their career without Amazon being mentioned. “The news [of Amazon coming to New York] sharpens the conversation,” said Haines. “If I’m the CEO of an agency or a group, Amazon can be a benchmark of the kind of place people want to work. So it’s going to put some pressure on them.”

At VMLY&R New York, executive director Rosanne Johnson has a slightly different perspective. “I don’t think any of us see the news as being detrimental,” she said. “But talent is fluid, and, certainly, different folks like different experiences. This is an enhanced talent pool.”

There can also be a silver lining to agency employees at hot platforms like Amazon: “It opens up a new level of opportunity because they know us and know our skill sets. We have unique partnerships with companies where we have former employees,” said Johnson.

It also speaks to a different way of working, said Ronnie Felder, who is executive director of talent engagement and employee experience, also at VMLY&R. “It used to be that your credibility was based on how long you’re at one place, but there is a level of respect now for experience with an Amazon or an Adobe. It dimensionalizes employees. It’s not terrible for someone to go be at a platform like Amazon, then maybe come back to an agency and bring value.”

As for what kinds of jobs agencies may find moving, recruiters say it’s likelier to be sales, planning or account management roles. Jessica Peltz, a partner at MDC Ventures, said that the growth opportunity for sales reps inside Amazon is “huge,” especially as budgets keep increasing and the trajectory can be more lucrative at an emerging platform like Amazon versus a Google or Facebook even. “If you’re a rockstar salesperson, agency or media side, there’s an opportunity.”

“Amazon is a massively desirable brand for agency people because it speaks to all the cues — brand-driven, tech-driven, media-driven, high growth,” said Haines. “It’s a hot property.”

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