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Amazon advertising is now worth $2 billion
Amazon’s advertising power continues to grow. The Seattle-based e-commerce company reported in its first-quarter 2018 filing that “other” revenue — which it said “primarily includes sales of advertising services” — grew 132 percent year over year to reach $2 billion.
In the fourth quarter of 2017, the ad business grew to about $1.7 billion, up about 60 percent year over year.
That’s a massive jump for the company, which spent the past quarter making improvements to its advertising offering. Media buyers have reported the company has been running a series of attribution tests to see how its advertising stacks up against the Facebook-Google duopoly and that it’s also been testing application programming interfaces for the Amazon Advertising Platform with a small group of agencies, as it plans to let marketers manage their programmatic campaigns on their own.
Amazon continues to expand its agency development group into “hundreds” of staffers as well.
Advertising has been a quieter growth driver for Amazon’s business. It still remains a small drop in the bucket, of course, but it’s gained attention. Even on the company’s earnings calls over the past couple of quarters, analysts have asked about ads. In the fourth quarter, CFO Brian Olsavsky specifically noted that “advertising was also a key contributor, as we’re continuing to make the offerings more valuable, both to customers and advertisers alike.”
The ad business was noticeably absent from CEO Jeff Bezos’ shareholder letter, but there has been serious growth in both sponsored products and headline search ads. It’s also becoming pricier: Merkle numbers show cost per click for sponsored product ads has increased 65 percent year over year as marketer interest grows.
At agencies, there has been increased attention as well, with Omnicom CEO John Wren specifically mentioning on the company’s own earnings call that Amazon is “coming over the hill” and posing a bigger threat to Google and Facebook. Amazon ad growth has also outstripped company revenue growth overall.
Overall, Amazon reported revenue of $51.04 billion, beating estimates.
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The post Amazon advertising is now worth $2 billion appeared first on Digiday.
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Sean Muller had very little knowledge of television when he launched iSpot.tv six years ago. Rather, he had an aha moment while Googling information about commercials seen while watching TV with his wife. It was impossible, or nearly so, to easily locate data such… Continue reading »
The post Podcast: iSpot.tv CEO Sean Muller Is Disrupting TV Measurement appeared first on AdExchanger.
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