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Understanding Amazon as an Advertising Platform

Amazon will earn $1.65 billion in net US digital ad revenues this year

Amazon may not typically be considered a digital advertising company, but the marketplace and content behemoth is the fifth largest generator of digital revenues in the US.

eMarketer estimates Amazon’s ad revenues are will total $1.65 billion this year—far below that of Google or Facebook, but above brands like Twitter and Snapchat, according to eMarketer’s latest report, “Amazon Advertising: Reconsidering the Retail Platform.” (eMarketer subscribers can access the report here. Nonsubscribers can purchase the report here.)

Amazon’s ad revenues are growing faster than almost every other major ad publisher, with a 48.2% increase expected in 2017. By 2019, Amazon will earn $3.19 billion in net US digital ad revenues, amounting to 3.0% of digital ad spending.

Net US Digital Ad Revenues at Amazon, 2016-2019 (billions, % change and % of total US digital ad spending)

This year, about a quarter of Amazon’s US digital ad revenues will come from search placements. Amazon will earn 1.1% of US search ad spending, enough to put it in fifth place after Google, Microsoft, Oath and Yelp.

Amazon has a larger share of the US digital display ad market, thanks in part to arguably the largest demand-side platform (DSP) in the country. The company will earn 3.0% of net US digital display ad revenues, making it the No. 4 display ad company in the country for 2017.

In the latest edition of eMarketer's "Behind the Numbers" podcast, analysts Nicole Perrin and Monica Peart dig into Amazon's advertising business. It's a lesser-known component of the ecommerce giant's revenue, but it's large and growing fast. For marketers, it offers some unusual twists and powerful tools.

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