Amazon’s Ad Business to Double

Brief

• EMarketer forecasts expect that Amazon’s ad business in the U.S will increase by twice its amount. Consequently, the company’s share of the ad market will get to 8.8% and grow to 10% in the coming year.

• The duopoly’s share of digital ads will drop this year according to the Q3 report. Google will hold 37.2%, a drop by one percentage point while Facebook will hold 22.1%, down from 21.8%. Microsoft will fall to 3.8% while Verizon will fall to 2.9%.

• The total ad spending in the U.S will go up to $129.34 billion which will be 54.2% of all U.S spending on ads. In 2019, mobile will make over 66% the expected $87 billion total. Traditional ad spending will decrease to 45.8%.
Insight

The new report by eMarketer shows that Amazon’s efforts to grow its ad business are beginning to pay off. The company is getting closer to the duopoly who so far have had a monopoly of the ad space. Amazon passed Microsoft last year to take position three.

Amazon’s share is still a long way to go before it can exceed that of the duopoly, but reports show that it is headed in that direction. Between 2015 and 2018, Amazon dominated product searches on Google according to a report by Jumpshot. Informed by this progress, marketers begin to shift 60% of their budgets on search that they would typically allocate to Google, to Amazon. 57% of brands have started placing ads on Amazon, and 97% of them are finding the investment worth it according to Feedvisor. Close to 50% of brands invest a minimum of $40 000 on Amazon ads, and 38% spend over $60 000. Advertisers report that their investments in the site have produced new customers, improved brand awareness and generated leads.

Marketers like Amazon because shoppers like it. It helps that the platform can target consumers in their shopping stages. Amazon allows marketers to enjoy a wealth of consumer habits data. To attract them, the company has been rolling out ad products for advertisers. The company recently launched a ‘Live’ feature for the site and a ‘moments’ feature which is only for loyal members. Amazon has also been pushing for exclusive partnerships with other brands.

The report by eMarketer underscored how digital has been growing to exceed traditional ad spend. Digital is expected to exceed 66% of total media spending in five years. According to the IAB, 2018 was a landmark year for digital ads. There was an increase of 22% from the previous year which was the first ever increase to be as high.

https://www.mobilemarketer.com/news/emarketer-amazons-ad-business-to-grow-50-as-it-gains-on-facebook-google/548792/

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