Amazon, one of the largest global online retailers in the world, has reported a dramatic increase in ad business revenue of 123 percent in their third-quarter. This substantial growth in revenue, which is primarily made up of ad sales, stems from Amazon’s strategic advertising platform known as Amazon Advertising.
Amazon’s advertising platform is designed to allow advertisers to buy everything in one place and to aid in delivering more visibility to their products online. Similar to Google search, when you type a keyword in Amazon’s search box, some of the top responses will actually be “sponsored” ads – these are considered Amazon ads.
Amazon is now the third-largest ad platform behind Google and Facebook. More and more consumers have adapted to using Amazon over Google as an initial product search engine. Approximately 55% of people begin their search on Amazon before checking other websites, according to results from a 2,000-person survey commissioned by the e-commerce startup, BloomReach.
Though Facebook and Google are notably recognized for leading online advertising, Amazon is set to take the official lead. Analysts at Piper Jaffray estimate margins on Amazon’s ad revenue could run above 75%, which is a large step above the 44% Facebook and 28% Google operating margin. This year, Amazon’s 36-hour sale was the biggest shopping event in Prime Day’s four-year history and brought in a record number of new subscribers.
Amazon’s CEO, Jeff Bazos, prioritized highlighting the growth of Amazon Business and its marketplace for business consumers. “Amazon Business has now reached a $10 billion annual sales run rate and is serving millions of private and public-sector organizations in eight countries,” Bezos said in a statement.
Amazon’s growing dominance in search could be an impediment to future Google growth.
There are many types of advertising formats on Amazon, and it’s important to realize which one fits your strategy best! With Direct Agents, our clients find success by tapping into our data-driven omni-channel methodology, focused on paid and earned media, both inbound to Amazon and outbound to their own sites. If you’d like to learn more about our Amazon Solution or have any questions, please reach out to firstname.lastname@example.org.