The Rapid Growth of Amazon Ads Business
Being the largest e-commerce retailer in the world by revenue, Amazon is currently also the third biggest digital advertising company behind Google and Facebook. However, the claim we really should keep an eye on is that Amazon is growing exponentially faster than the other players.
As Amazon has complete information about consumers’ buying habits, this data allows them to determine exactly what people are buying now and what they are likely to buy next. So if you are still wondering where to invest your advertising budget, the answer is clear.
Unprecedented ads leader
In Q3 of 2022, Amazon’s ads revenue grew 25% to $9.5 billion – an impressive 10 times higher than Google’s advertising revenue growth, which also includes YouTube. Facebook, including Instagram, even saw a decrease in 2022, dropping 3.7%, closing the gap between Facebook and Amazon even more.
At the end of 2019, Facebook Ads was more than six times bigger than Amazon Ads but is now only three times the size. When we compare Amazon Ads with other platforms, it exceeds Pinterest, Snapchat, and Twitter combined.
Amazon’s continued ad revenue growth is a testament to its strong media strategy. The company successfully uses performance-based solutions that prioritize customer-focused ads based on real-time behaviour. Amazon Ads’ success demonstrates its ability to monetize the incredibly accurate and relevant data collected on the platform.
Amazon has been evolving and expanding its advertising features since its founding. In the beginning, only simple search promotion with standard ads was available, but now Amazon actively uses new technology and data to expand its advertising functions. There are nine different products offered by Amazon Ads right now:
- Sponsored Products: These are the self-service pay-per-click ads that are being used for individual product listings and appear in shopping results as well as on product detail pages.
- Sponsored Brands: Another type of self-service pay-per-click ads that appear in shopping results but also contain a custom headline, brand logo and multiple products.
- Sponsored Display: Self-service display ads that use automatically generated ad creatives and target audiences based on relevant Amazon shopping interests.
- Stores: These free multi-page brand sections on Amazon provide a portfolio of your products and help you tell the brand story.
- Audio ads: These ads are being played on Amazon Music’s free tier on Alexa-enabled devices, including the Echo, Fire TV, and mobile & desktop computers.
- Video ads: Streaming TV ads appear on connected TVs, networks & channels of publishers, as well as IMDb and IMDb TV. Out-stream video ads appear outside of video content, both on and off Amazon.
- Custom advertising: These customized advertising opportunities are created in conjunction with Amazon Ads account executives.
- Amazon DSP: Amazon’s demand-side platform allows advertisers to buy display, video and audio ads programmatically.
- Amazon Attribution: This product measures how non-Amazon ads media shape results on Amazon.
Reasons for success
The availability of ads outside of Amazon is indeed one of the main reasons for Amazon Ads’ rapid growth. According to Marketplace Pulse, “Amazon advertising’s growth is due to the whole network reaching further, especially off Amazon, and in more ways than bottom-of-the-funnel ads.”
Leading brands and agencies use Amazon ads to spread throughout the Internet, not just on sites owned by Amazon.com. Ads are delivered to external websites to retarget customers who have visited Amazon when they visit those other sites. As the ads bring the shoppers directly to the company site, it has a high chance of leading to click-through and conversions.
Using a variety of Amazon Ads options makes brands and products more accessible to Amazon shoppers no matter where they are searching. In addition, Amazon recently announced that brands that don’t sell on Amazon, such as restaurants and hotels, will now be able to advertise on the other platforms of Amazon’s advertising network, for example, the live streaming platform Twitch.
Amazon Ads open up possibilities for businesses to reach new and potential customers in a variety of ways. It is becoming less limited and more customizable, so brands can meet shoppers wherever they are, connect to them and build a relationship that results in loyal, returning customers.
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