In recent years, Amazon has solidified its place as the third-leading digital ad seller in the US. But the events of 2020 have helped it carve out additional share earlier than expected and made it clear that Amazon is positioned to continue growing its ad business robustly.
How will the pandemic affect Amazon’s advertising business?
The pandemic is accelerating growth in Amazon’s ad revenues, along with its ecommerce sales. At the beginning of March, we had forecast 32.5% growth in Amazon’s net US digital ad revenues this year. By early October, after Amazon reported rapid growth in Q1 and Q2 despite the disruptions of the spring, we revised our expectation upward to 41.0% growth this year. Amazon will now earn more than 10% of US digital ad spending in 2020.
How are advertisers approaching Amazon this year?
For advertisers with goods to sell in the marketplace, Amazon ads have been a key performance lever this year, 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 really changed—though more brands and retailers are considering Amazon from an ecommerce perspective due to the pandemic.
How will Amazon continue to attract advertiser spending?
Amazon is continuing to roll out new ad products, including more ways for advertisers to use video and other opportunities for advertising higher in the funnel. Sponsored Brands Video attracted about a quarter of its clients’ Sponsored Brand ad spending in Q3 2020, according to ad agency Tinuiti. Amazon is also working to offer more measurement tools to press its advantage as targeting- and attribution-related data becomes harder to come by.
WHAT’S IN THIS REPORT? This report includes our latest forecast of digital ad revenues at Amazon, comparative Amazon ad benchmarks for 2020, and other key Amazon ad trends.
KEY STAT: Amazon’s net US digital ad revenues will rise by 41.0% this year as consumers dramatically shift to more ecommerce shopping and advertisers pay to get in front of shoppers at their leading destination.
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