Amazon reveals ad services revenue as segment hits $9.7B
A new article on Marketing Dive says Amazon's advertising services generated $9.7 billion in revenue in the fourth quarter, a 32% year-on-year gain, according to an earnings release. This is the first time the company has broken out the specific financials of advertising sales, which used to be folded under its "other" segment, where they made up the lion's share.
For the full year, Amazon saw about $31.15 billion in ad revenue. Much of that activity is directed at sponsored ad placements, where brands pay to have their products appear in desirable spots around Amazon's e-commerce platform, including search results. But executives emphasized opportunities in video advertising on Fire TV, IMDb TV and Twitch, which are starting to add more premium programming for advertisers.
Longer-term, the e-commerce giant is trying to round out its tech stack and usability through offerings like its demand-side platform, Amazon DSP. Building out a robust and accessible advertising infrastructure will be important as traditional retail rivals ramp up their efforts to create similar networks.
Amazon breaking out its advertising services for the first time is significant, and it's easy to see why the company chose to do it now: The business is booming, putting a tidy bow on a strong period. Amazon saw total revenue hit $137.4 billion in Q4, which includes the critical holiday window. Profit reached $14.3 billion.
Analysts have long speculated that Amazon would eventually convert digital advertising's long-standing duopoly of Facebook and Google into a triopoly. That forecast is more firmly realized as brands seek out networks that can place their marketing messages closer to the point of sale.
Amazon's "other" segment that was mostly comprised of ad sales steadily rose in recent years to be one of the fastest-growing areas of business, occasionally surpassing core categories. Making ads an independent breakout mostly feels like a formality, but it does speak to where Amazon's priorities could be shifting in 2022.
Its ad services are still considerably smaller than those of Facebook and Google, which also reported earnings this week. Google generated more than $61 billion in ad revenue in Q4 -- slightly short of double what Amazon saw for the full year -- while Facebook drew in $36 billion. But the balance of the scales will likely continue to shift, especially if Amazon's expansion continues on its current trajectory.
For the full year, Amazon saw about $31.15 billion in ad revenue. Much of that activity is directed at sponsored ad placements, where brands pay to have their products appear in desirable spots around Amazon's e-commerce platform, including search results. But executives emphasized opportunities in video advertising on Fire TV, IMDb TV and Twitch, which are starting to add more premium programming for advertisers.
Longer-term, the e-commerce giant is trying to round out its tech stack and usability through offerings like its demand-side platform, Amazon DSP. Building out a robust and accessible advertising infrastructure will be important as traditional retail rivals ramp up their efforts to create similar networks.
Amazon breaking out its advertising services for the first time is significant, and it's easy to see why the company chose to do it now: The business is booming, putting a tidy bow on a strong period. Amazon saw total revenue hit $137.4 billion in Q4, which includes the critical holiday window. Profit reached $14.3 billion.
Analysts have long speculated that Amazon would eventually convert digital advertising's long-standing duopoly of Facebook and Google into a triopoly. That forecast is more firmly realized as brands seek out networks that can place their marketing messages closer to the point of sale.
Amazon's "other" segment that was mostly comprised of ad sales steadily rose in recent years to be one of the fastest-growing areas of business, occasionally surpassing core categories. Making ads an independent breakout mostly feels like a formality, but it does speak to where Amazon's priorities could be shifting in 2022.
Its ad services are still considerably smaller than those of Facebook and Google, which also reported earnings this week. Google generated more than $61 billion in ad revenue in Q4 -- slightly short of double what Amazon saw for the full year -- while Facebook drew in $36 billion. But the balance of the scales will likely continue to shift, especially if Amazon's expansion continues on its current trajectory.
-
Jamell -
Thanks - 1 reply
{{ DiscussionBoard.errors[11702572].message }}-
WF- Enzo Administrator-
Thanks
Signature
{{ DiscussionBoard.errors[11703020].message }} -
-