Amazon’s share of US digital ad market edges past 10%

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.

• Amazon's balance sheet was further bolstered by impressive growth in video ad revenues derived from services such as Amazon Fire TV, Twitch and IMDb TV as consumption increased.

• 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.