Amazon’s share of US digital ad market edges past 10%
Amazon has cemented its position as the third-largest ad publisher in the US behind Google and Facebook in the aftermath of a pronounced consumer migration towards online spending in 2020, according to analysis by eMarketer.
Where customers come advertisers duly follow, propelling Amazon's ad business to 52.5% growth and pushing it above a 10% share of the US digital ad market for the first time.
Amazon’s 2020 victory in numbers
Profiting from the pandemic, Amazon has made up ground on the ad publishing duopoly of Google and Facebook as brands queue up to build their presence among the e-commerce giant's ever-growing customer base.
Such shifts have turbocharged Amazon's US ad revenues which leapt 52.5% last year to hit $15.73bn, equivalent to a share of the US digital ad market of over 10% for the first time, according to the eMarketer report.
Driving this surge was search revenues from sponsored products and brands as a highly competitive market saw firms jostle among themselves to hand over wads of dollars.
Recent progress, while impressive, still leaves Amazon languishing in the shadow of twin tech titans Google and Facebook, which commanded a 28.9% and 25.2% share of the US digital ad market respectively in 2020.
Amazon will continue to snap at their heels, however, with eMarketer projecting its muscle to keep growing, reaching 10.7% this year before rising further to 11.9% in 2022 and 12.8% in 2023.
Why Amazon's ad growth matters
The upshot of this growth is that Amazon's US ad business is set fair for a period of breakneck growth, with eMarketer forecasting that the division will grow a further 30.1% this year, ahead of forecasts made as recently as the fourth quarter of 2020, surpassing $20bn for the first time.
If this double-digit momentum is maintained Amazon's US ad business could account for over $30bn of revenues as early as 2023.
Dismissing suggestions that present performance amounts to a mere pandemic-aberration in consumer behaviour, Nicole Perrin, a principal analyst at eMarketer, said: "For advertisers with goods to sell in the marketplace, Amazon ads were a key performance lever throughout 2020, especially with the cheap ad opportunities available in Q2, when many sellers suffered out-of-stocks and dropped out of the auctions.
“Amazon advertising has long been a must for marketplace participants, and that hasn’t changed—though more brands and retailers are considering Amazon from an e-commerce perspective due to the pandemic.”
Advertising is already the fastest-growing activity undertaken by Amazon after jumping 64% year-on-year to reach $7.95bn in the fourth quarter.
Illustrating the scale of the e-commerce monopolies success Amazon raked in $125.56bn in net sales over the three months to January, a 44% premium on the same period last year and eclipsing the $119.7bn penciled in by analysts.