Amazon’s ad business in hot pursuit of Facebook and Google

Amazon passed $2bn in net revenue (profit) for the first time in the second quarter of 2018, boosted by its rapidly growing high margin cloud computing business (is there anything Amazon doesn’t do?)

Buried in the numbers is its ad revenue and that reached a chunky $2.2bn, way ahead of expectations and equivalent to a sixth of Facebook’s $13.2bn. Facebook is almost wholly dependent on advertising.

So much business goes through Amazon’s site (including from third parties) that it’s a kind of global economy in its own right. And many advertisers are choosing to commit all their efforts to it, often dealing direct and leaving media agencies with their noses pressed up against the glass.

Unless something goes amiss at Amazon – and it might, look at Facebook’s share collapse as it missed growth targets – Amazon may soon be on a par with Facebook and hard on the heels of the even bigger Google. Google took $26bn in Q2 2018, with 86 per cent coming from advertising, chiefly SEO – really direct marketing.

But so is advertising on Amazon so Jeff Bezos’ mighty construct is arguably a bigger threat to Google than it is to Facebook.

Google owner Alphabet has fingers in lots of pies of course, including self-driving cars, but it’s SEO that brings home the bacon. Amazon was a massive player in online retail (now it’s in offline retail too with Whole Foods and is planning an online pharmacy business) before advertising crossed its mind. Intriguingly it now says advertising is high margin too.

Watch out Google, Amazon is coming.

You May Also Like

Amazon facebook google

About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

One comment

  1. Small correction. Pay per click (PPC) search advertising is Google’s “cash cow” not SEO.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Share
Tweet
+1
Share