Amazon’s ad revenues increased 50% year over year in the third quarter to $8 billion, as more customers purchase from home. Amazon will compete with Google and Facebook for ad expenditures in 2020, according to EMarketer. Walmart, Instacart, Walgreens, and other businesses have joined Amazon in seeking for ad revenue.
A vast and growing ad business
In 2020, Amazon earned $21.5 billion from advertising, up from $9.3 billion in 2019.
Advertising, while a small part of Amazon’s overall earnings from retail sales and Amazon Web Services, its cloud division, is increasing rapidly. Moreover advertisers’ search costs, which primarily go to Google, are being reduced by Apple. So does its audio and visual sales pitch.
Amazon’s ad business
With long-time Amazon workers like Colleen Aubrey and agency and brand veterans working directly with marketers, Amazon has also developed a team of execs to pitch advertisers on its ad business.
Amazon is losing advertising cash
Albertsons, Instacart, and Walmart are all trying to establish their own ad businesses and acquiring top personnel.
Advertisers struggle on Amazon
Marketers say Amazon is difficult to use. Amazon says its convoluted method is intentional, but it’s also pushing out tools to help advertisers buy and measure ads. Additionally that structure has created a small industry of companies that help advertisers navigate the site.