How does Amazon grew 20+ billion dollar advertisement business.
Amazon surpassed Microsoft and currently hold third largest internet advertisement business, and the first two are Facebook and Google respectively. It grew from sponsored product listing on its e-commerce platform to sponsored video/audio advertisement on its widely popular services like prime videos, audible. We can’t say that we didn’t saw it coming but we didn’t noticed it, all worked up behind the scene.
In 2019 Amazon’s ad business was 7.8% which was grown to 10.3% 2020, it’s 53% growth last year. Pandemic boosted Amazon revenue, and projection for 2021 is around 20 billion dollars. It seems that Google’s advertisement revenue is most threatened by Amazon, as search giant’s ad revenue decreased by 29% to 27%. Amazon with its wide range of products like Amazon marketplace, Twitch, IMDb TV, Fire TV, Ad Supported Kindle Devices and Audible also are seeing significant growth in ad revenues.
Types of Ads and List of Associated Services:
Amazon generates revenue from video ads from Prime Videos, Amazon Live (on E-commerce platform), IMDb, Amazon devices like Fire TV, and various properties across the web.
A big push to Amazon’s video ad revenue through Prime Video can be contributed by 10-year deal with NFL to become exclusive broadcaster of “Thursday Night Football”. Amazon Live is another way for showcasing sponsored product ads on it’s e-commerce market, and its Amazon’s take on on-air shopping channels like QVC.
Search and display ads:
It currently accounts for 74% of Amazon’s ad revenue through it’s e-commerce channel. Amazon generate hefty revenue from the top consumer brands by giving precious placement on the biggest e-commerce site. which they lends to A strong affiliate marketing network also contributed a lot of revenue generation for amazon. Cost per click for Amazon search advertising was $1.27 in August, up from 86 cents a year ago.