The online retailer’s exponential growth is having both positive and troublesome effects on the local advertising industry - but is it Am-ageddon? asks LBB’s Addison Capper
As we hurtle closer towards Christmas, there’s one question that keeps popping into my mind. That question is, ‘what on Earth would I do without Amazon?’ I’m an immigrant living in a country away from my family and Amazon is an bona fide godsend when it comes to getting just about any type of gift, anywhere.
And I’m (unsurprisingly) not alone; with the online retailer shipping a whopping 43% of all online sales
. The business was founded in Seattle in 1994 and is still headquartered there today. In 2010 it moved its campus into South Lake Union, a once industrial area of the city’s downtown, and the stats regarding its status in the area are dizzying. And, of course, while it has its roots in e-Commerce, it’s a bona fide tech behemoth. Amazon Web Services is leading the pack when it comes to public cloud computing
, and, thanks to the ubiquitous Alexa, Amazon is predicted to own a 70% share
of the voice controlled speaker market by the end of 2017.
Around 40,000 of Amazon’s 300,000 worldwide employees are based in Seattle – that’s 7.5% of the city’s working age population
. This figure shows no signs of dipping either. When this Business Insider article was written in April, Amazon had 10,000 open jobs listed in the Seattle area
and its South Lake Union campus is all ready over-flowing, with big plans in place for new offices in Denny Triangle, a neighbourhood just a few minutes walk away. This new outpost will include three huge, greenery-filled ‘Biospheres’ and several skyscrapers. By completion, which is expected in 2022, it’s estimated that Amazon will occupy about 12 million square feet of real estate across Seattle – more than 20% of the city’s total office space
. And all of this is in addition to its soon-to-be second US headquarters
Amazon’s exponential growth is having knock-on effects for the city’s advertising industry – both to its benefit and detriment. The local advertising scene is made up of a collection of large agencies, such as Publicis and POSSIBLE, and boutique, specialised shops (with “not a lot between the two”, according to Jonathan Dunn, Director of Production at Belief Agency). Each company I spoke to for this story had worked with Amazon on at least a project basis so there’s certainly work to be had from the company. But that’s not where the story ends.
Daniel Carlson, SVP, Head of Strategy at POSSIBLE Seattle, says: “Amazon has been amazing for the city. The biggest impact on agencies, however, has been in recruiting. We are losing people to Amazon because we can’t compete with their offers. They are hiring like mad, so it is getting harder to keep people that are being approached by them.”
Ad agencies losing talent to the tech industry is not unique to Seattle, but it was a big issue for a lot of locals we spoke to for this story. However, people were also enthusiastic about the type of people being attracted by Amazon, and the likes of Facebook and Google, who have also opened up hubs locally, and Microsoft which was also founded nearby. “There are a lot of newcomers to Seattle, thanks to Amazon’s ever-growing workforce,” says Candice Noel Nagel, a Designer at WONGDOODY. “It has begun to evolve how we think of our local audience — we aren’t all lifelong PNWers [Pacific North-Westerners] anymore, but instead an eclectic bunch of transplants. It would be amiss to say there haven’t been growing pains for fear of losing a bit of Seattle’s authentic edge, but there are also benefits from having more diverse perspectives represented.”
Candice’s colleague Mairi McCaslin, an Assistant Strategist adds: “Amazon is attracting a lot of talented, young people to come live and work here. And we’ve already seen how that has drawn more of a tech presence here with brands like Facebook and Google opening up offices here which in turn are attracting their own groups of people to the area. And I think wherever there are young, savvy, technologically-minded people, cool companies and brands will follow. Which means more opportunities for people in creative industries.”
On top of attracting – and poaching – talent, Matt Peterson, Executive Creative Director at Wexley School for Girls, believes that Amazon is also playing a role in altering the type of advertising work being done in the city.
“There were a lot of agencies that grew up with Microsoft work. Unfortunately, there hasn’t been a lot of memorable brand work that has come from Microsoft,” says Matt. “It’s not what they’re famous for anyway. So it wasn’t the best for the creative output of the city. Similarly, there are a lot of agencies, including us, who are doing project work for Amazon. They are like a 100 businesses inside a business. The difference is that Amazon is really starting to get the importance of brand building now.”
Matt also notes the importance of understanding how to use data when working with a results-based business such as Amazon. “Amazon claims to be the most customer-obsessed company in the world,” he says. “Everything they do is an experiment in ways to make your life easier. And a big part of that is big data. So a big effect has been the rise of data and measurement inside every size of agency. This is not unique to Seattle, but marketers here really have to answer up the ladder with solid logic and data.”
What’s more, there are other big players on the doorsteps of Seattle’s advertising agencies. As mentioned, Microsoft was founded in the city, and there are businesses such as Starbucks, T-Mobile, Boeing and Expedia also in the area. “There’s a lot of creative work that’s distributed throughout the city,” says Jonathan from Belief Agency.
Daniel from POSSIBLE worked in New York City for 18 years before heading west to Seattle and can see differences in the ways each advertising market works due to the nature of its clients. “I would call Seattle a digital native city, the city is built on innovation, in particular, technology. Seattle thinks “build” first, whereas NYC is classic Madison Avenue, so we thought “ad” first.”
It’s something that Matt from Wexley, who spent time in Amsterdam with StrawberryFrog, agrees with. “I think that is the difference compared to Seattle [with Amsterdam]. Tech is the lead dog, and marketing is in tow. It’s a bit of a ‘build a better mousetrap and they will come’ innovation city. Versus building a better brand and they will come.”
Outside of the day-to-day, locals enthuse about a tight-knit, local community that generally wants each other to succeed. Daniel from POSSIBLE sees a group that’s “more collaborative than competitive” and that cheers for each other during award shows such as the Addys. Candice from WONGDOODY adds that, despite the city’s growth and establishment as a major city, “Seattle continues to feel small in the best way”. Her colleague Eva Doak, an Account Supervisor likes the opportunities to collaborate that come with multiple companies working on the same brand.
People also enjoy a proper work-life balance – a rarity in bigger cities – and the joy of being relatively close to nature. The waters of Elliott Bay are right on the city’s door step and the woodlands and mountains of Wenatchee National Forest and Olympic National Park are just a short drive from the city.
“Exciting times in Seattle, and the appetite and need for creativity is rising,” muses Matt from Wexley. “Tech businesses are maturing into global household names, and they need to stay interesting. At Wexley, we’re also seeing the old guard companies re-inventing themselves too. Weyerhauser, Darigold, PCC markets, 100 year old brands all coming to us to modernize their stories.
“It’s a cool mix of natural resources and new tech that is bringing the city forward. You get the feeling that we collectively want to be known as a big time creative city, and we want the best talent to bring their ideas here.”