October 9, 2018
With US advertisers pacing to spend about $4.6 billion on Amazon’s advertising platform in 2018, the company has become the third largest online advertising platform in the United States.
According to an article in Fortune, the top two platforms, Facebook and Google, account for 58% of the entire US online advertising market. In 2018, Facebook is projected to make $21 billion while Google is on track to make close to $40 billion. So, no, it isn’t likely that Amazon will be reaching the ad revenue levels of the top two industry giants any time soon, but the spend increase of 144.5% YoY has allowed them to blow past Microsoft and Verizon’s Oath.
This dramatic growth can be attributed to Amazon’s ability to elicit direct actions from its audience. According to the above article’s author, Jonathan Vanian, “It makes sense that an advertiser would want to run ads hawking its product on a service dedicated to the sole purpose of shopping.” While Amazon’s most effective placements are indeed on its own site, other advertisers can also promote products that are for sale within Amazon and reach users with the same “intent to purchase.” However, Amazon also has its own DSP (demand side platform) allowing advertisers to reach an audience on other websites, apps, and videos.
Will Amazon’s consumer focus eventually allow it to gain the upper hand on Facebook and Google? Maybe… Their current rise is impressive regardless, and advertisers that haven’t yet would do well to take notice