Amazon’s advertising revenue has been growing at a steady pace in the past few years. It’s now the third-largest digital advertising company in the world.
It’s also one of the most powerful advertising platforms on the internet, with its ad revenue dwarfing that of other ecommerce sites like Walmart and eBay.
Amazon Advertising Revenue
Advertising on Amazon is one of the fastest growing areas of the company’s business. It’s a big part of its revenue growth, and Amazon’s ad strategy will likely continue to evolve as the company continues to improve its ad capabilities.
A key reason for the growth is that Amazon captures more first-party customer data than any other digital ad platform. This data is a powerful asset that could be leveraged to improve ad performance.
In 2021, Amazon reported $31 billion in ad revenue, making it the third-largest online ad seller behind Google and Facebook. This figure was larger than the ad revenue of YouTube, which reported $28.8 billion in ad sales.
It’s a clear sign that the ad market is shifting to retail media, which has a much larger audience than traditional ads on search engines. GroupM forecasted that ad spending on retail media will reach 10.7% of global advertising in 2022, up from 8.8% in 2020.
The ad revenue from Amazon’s advertising services business segment, which includes sales of sponsored ads, display and video, reached more than $31.2 billion in 2021, up 58% year over year. This represented 6.6% of Amazon’s total net sales in 2021.
This ad revenue is one of the reasons why Amazon has become a major ad seller. It is one of the most lucrative ad businesses in the world, and it’s growing quickly.
Advertisers will continue to see increasing demand for Amazon‘s advertising options, and that will drive more ad spend in 2021. It is important for merchants to understand that there are many different ways to optimize their Amazon ad campaigns.
In addition to the many ways to create ad campaigns, it is also important for merchants to understand what metrics are most relevant to their business goals. This can help them understand the value of ad spend and identify which products and strategies to use on Amazon.
Amazon Advertising Spend
Amazon is a colossal advertiser that rakes in $30+ billion in advertising revenue per year. This ad spend is growing, and it looks set to keep on expanding.
According to Amazon’s 2021 financial results, advertising and other promotional costs for Amazon products and services rose by 6 billion dollars in 2021, a 55% increase over 2020. However, this was the first time Amazon has cut its advertising outlay in 17 years.
Despite the increased ad spending, some brands still see advertising as a cost-effective way to grow their business. This is because Amazon’s e-commerce market is a huge one and the company’s central position in the industry makes it a natural choice for brand advertisers to invest in.
In addition, Amazon’s attribution feature allows sellers to track which ads drive sales and what the ROI is from those campaigns. Using this data, brands can make more informed decisions and improve their overall ad performance.
Amazon also has access to more sophisticated marketing data than Google and Facebook, and can offer advertisers ad insights that they can’t get from other platforms. This has helped it catch up with other online advertising giants like Microsoft, Snap, and Pinterest, whose advertising revenues totaled $10 billion in 2021.
Adspend on Amazon is expected to continue to expand in 2021 and beyond. As more marketers invest in sponsored search and brand-building campaigns, and as non-endemic advertiser categories such as financial services look to target users on the platform, Amazon will continue to attract spend.