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THE RISE OF AMAZON ADVERTISING: This is exactly what Amazon is doing to siphon billions of ad dollars from Google and Facebook and why brands love it (AMZN, FB, GOOGL)


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This is a preview of The Rise of Amazon Advertising research report from Business Insider Intelligence.
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Amazon is increasingly ramping up on ad offerings across its ecosystem, in a mounting bid to lure ad dollars away from platforms like Google and Facebook, YouTube, traditional TV, and the connected-TV device maker Roku.

Amazon will continue to invest in expanding its ad business beyond display ads on its e-commerce platform and mobile shopping app, yielding both powerful opportunities for brands and rising threats to incumbents.

Although Amazon ad revenue growth has decelerated in recent quarters, it could meaningfully resurge as Amazon develops new offerings around its owned-and-operated platforms and devices.

Those include its ad-supported video service Freedive under IMDb, planned ad-supported channels for Fire TV, live NFL games on Amazon Prime Video and live-streaming video platform Twitch, and a new ad-supported tier of Amazon Music for Echo and Alexa-enabled devices. Further, Amazon’s ability to attract ad spend is likely to continue to overtake e-tail and retail rivals like Walmart and Target that are likewise expanding their ad businesses.

In The Rise of Amazon Advertising, Business Insider Intelligence examines how and why Amazon’s ad business is growing as it diversifies its various ad products across its ecosystem; how Amazon could pose a threat to ad dollars that currently flow to the duopoly, TV, and connected-TV giant Roku; and why Amazon is likely to remain dominant versus retailers expanding their own ad offerings. We also comprehensively lay out Amazon’s growing array of ad opportunities across its formats, including display, video, and audio.

The companies mentioned in this report are: Amazon, Facebook, Google, Procter & Gamble, Roku, Spotify, Target, Twitch, Unilever, Walmart, YouTube.

Here are some of the key takeaways from the report:

Amazon’s ad revenue growth is accelerating year-over-year (YoY), but has decelerated in recent quarters, likely as its core display ad products reach maturity. In 2018, the e-commerce giant generated $10.1 billion in ad revenue, up 117% YoY from $4.7 billion. But growth fell from 97% YoY in Q4 2018 to 36% YoY in Q1 2019.
Amazon’s ad business will grow overall as it diversifies its ad offerings beyond display ads and across its ecosystem. Amazon’s ad strength will continue to come from its unique ability to target millions of consumers with purchase data from the e-commerce platform, but it will increasingly do so across its variety of popular platforms (Amazon.com, mobile app, Twitch, IMDb’s Freedive) and devices (Fire TV, Echo).
Amazon will eat into Google’s and Facebook’s share of the digital ad pie in coming years, but it won’t overtake either player in the near to medium term. By 2023, Amazon could take as much as 14% of total US digital ad sales, up from 9% in 2019, per Business Insider Intelligence estimates, based on eMarketer data.
Beyond the duopoly, Amazon could tap the $70 billion TV ad …read more

Source:: Business Insider

      

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