Although Amazon has not yet separated the advertising business revenue into a single category in its financial report, it still hides it in the “other” project. However, in the financial report, Amazon also clearly noted that the revenue of the “other” category was first. It grew by 139% year-on-year to reach 2.031 billion U.S. dollars (approximately NT$60.7 billion), mainly due to advertising contributions.
At the same time, Amazon Chief Financial Officer Brian Olsavsky stated at the financial report that the advertising business has grown very fast and is now a multi-billion dollar project. He also mentioned that advertising is not only very good for revenue, but also makes a significant contribution to Amazon’s first quarter profit. He believes that advertising is worth looking forward to both from the product side and the financial side.
Of course, even if this $2 billion is counted as Amazon’s advertising revenue, compared to Google’s and Facebook’s quarters, they’re up to US$26.6 billion (approximately NT$764.6 billion) and US$11.8 billion (approximately NT$352.5 billion). Income, there is a very big gap. However, from the perspective of Amazon’s growth rate and trend development, it is absolutely impossible to underestimate the opponent.
For example, a research study published by research firm eMarketer in March this year pointed out that Amazon’s digital advertising revenue in the United States will exceed US$2 billion for the first time this year and surpass Microsoft and Oath in 2020, becoming the third largest digital advertiser in the United States. As for the performance of Amazon’s first quarter financial report, eMarketer’s forecast may still underestimate Amazon’s advertising business growth rate.
In addition, from the Amazon advertising model described by Orsavski, they are mainly to help advertisers, so that new brands, new products have the opportunity to be seen by consumers, and thus enhance the brand and product awareness and sales performance. And for Amazon, which has already established a large virtual retail channel and has begun to enter the offline market, and has more than 100 million Prime members, it is equivalent to mastering a wide range of consumer contacts and mastering a large number of Consumer behavior data.
In addition, Amazon has gradually captured the United States in recent years, such as clothing, daily necessities, 3C and other retail categories, so at least in the Amazon market, Amazon has gradually achieved the first position in the hearts of consumers shopping, and therefore, now when the United States When consumers want to buy goods, many people’s first actions may not be on Google, but directly to the Amazon search.
So perhaps it can be said that advertising is actually an “off-the-shelf” business under the ecosystem established by Amazon for many years. This may also be why, even if advertising revenue is currently smaller compared to Amazon’s retail, AWS and other businesses, Olsavsky will specifically mention that advertising has made a significant contribution to Amazon’s overall profitability.
Echo may place voice advertising advantages for Amazon
In addition, don’t forget that in the future of voice search, Amazon’s Amazon Echo series of smart speakers that have been sold in recent years have grabbed most of the market share and laid a certain degree of user base, and this is very likely. It will also be a major variable to change the battle situation in the future digital advertising market.
On the whole, the performance of Amazon’s financial reports and the attitude of Amazon’s senior executives talking about advertising in recent quarters have become more and more optimistic from the past. It can be seen that Amazon’s emphasis and influence on the advertising market are Continue to pull up quickly.