Amazon's advertising business grew by $15.73 billion as consumers' appeal surges

Data showed that Amazon's advertising business grew 53% to $15.73 billion, increasing its market share from 7.8% in 2019 to 10.3% last year.

Amazon’s U.S. ad business will grow another 30% this year , and is expected to surpass $20 billion for the first time, eMarketer said. The researcher estimates that Amazon’s ad business will continue to thrive, exceeding $30 billion by 2023 as marketers place ads on its e-commerce sites. Video ad revenue on its social media platforms, including Amazon Fire TV, Twitch and IMDb TV, is also growing significantly.

eMarketer predicts that Amazon's search advertising scale will increase to $14.53 billion this year, and it is expected to increase its market share from 13% in 2019 to 19%, and exceed 20% by the end of 2022. It will become the biggest threat to Google.

Amazon's expected growth in digital advertising shows its strong appeal to consumers . Amazon is well-positioned for continued advertising growth as packaged goods companies shift their trade spend to its platform and Amazon's retail environments often include coupons , discounted ad placements and syndicated advertising .

"As consumers shift more spending online, trade spending and shopper marketing will quickly follow, with the bulk of that money going to Amazon, " said Eric Haggstrom, an analyst at Insider Intelligence .

He pointed to Amazon's recent 10-year deal with the NFL as the exclusive broadcaster of "Thursday Night Football" as a major driver of growth in viewership and advertising revenue for Amazon Prime Video .

E-commerce channel advertising, which includes search and display ads on its retail properties, accounts for about 89% of Amazon’s advertising business, eMarketer estimates . The rest comes from ads on its video platform and ads sold through its demand-side platform for ad placements outside of its digital properties.

This year, Amazon’s share of the nearly $24 billion e-commerce channel advertising market will reach 76%, far exceeding second-place Walmart, which has a market share of 6.5%.

As Amazon pushes deeper into the digital advertising market, Google and Facebook have responded by expanding their e-commerce capabilities .

Google has not only grown Google Shopping to attract retailers, but has also launched initiatives, such as a recent partnership with grocery chain Albertsons, to deliver information to shoppers. Facebook has added more shopping features to its social network and apps including Instagram , Messenger and WhatsApp.

However, Amazon's dominance in e-commerce gives it a major competitive advantage , according to eMarketer .

Analysts believe : "Both companies still have a long way to go to catch up with Amazon in the e-commerce field , and there is a great possibility that they will lose to Amazon . "

Amazon

Advertising

Consumer appeal