Credit: Christian Wiediger via Unsplash
Giant online retailer Amazon lifted advertising revenue 18% to $ 17.288 billion in the December quarter.
This represented a slowing in the rate of growth from previous quarters but is still ahead of Amazon’s main business.
For the year ending December, advertising brought in $US56.214 billion, with a growth rate of 18%.
Amazon now ranks third behind Google and Meta for digital advertising revenue with a global share of about 9%.
Amazon is still building its advertising on streaming platform Prime Video which started displaying ads in Australia in July last year.
The company says Advertising is an important contributor to profitability in the North America and international segments.
“In advertising, we remain pleased with the strong growth on a very large base, generating $17.3 billion of revenue in the quarter and growing 18% year over year,” CEO Andy Jassy told analysts in a briefing
That's a $69 billion annual revenue run rate, more than double what it was just four years ago at $29 billion.
“Sponsored products, the largest portion of ad revenue, are doing well and we see runway for even more growth.
“We also have a number of newer streaming offerings that are starting to become significant new revenue sources.
“On the streaming video side, we wrapped up our first year of Prime Video ads, and we're quite pleased with the early progress and headed into this year with momentum.
“We've made it easier to do full-funnel advertising with us. Full funnel is from the top of the funnel with broad reach advertising that drives brand awareness to mid-funnel sponsored brands let companies specify certain keywords and audiences to attract people to their detailed pages or brand store on Amazon, to bottom of the funnel, where sponsored products help advertisers service relevant product ads to customers at the point of purchase.
“We make this easy for brands to sign up for and deploy across our growing advertising. We also have differentiated audience features that leverage billions of customer signals across our stores and media destinations.
From Amazon Marketing Cloud secure clean rooms provide advertisers the ability to analyze data, produce core marketing metrics, and understand how marketing performs across various channels.
If an advertiser uses streaming TV, display, sponsored products, and other ad types in their campaign, multi-touch attribution will show the relative contribution of each to their sales.
Overall, Amazon reported net sales up 11% to $638 billion in 2024. For the December quarter it was 10%.
“The holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners, and employees who helped make it so,” said Jassy.
“When we look back on this quarter several years from now, I suspect what we’ll most remember is the remarkable innovation delivered across all of our businesses, none more so than in AWS where we introduced our new Trainium2 AI chip, our own foundation models in Amazon Nova, a plethora of new models and features in Amazon Bedrock that give customers flexibility and cost savings, liberating transformations in Amazon Q to migrate from old platforms, and the next edition of Amazon SageMaker to pull data, analytics, and AI together more concertedly.
“These benefits are often realised by customers (and the business) several months down the road, but these are substantial enablers in this emerging technology environment and we’re excited to see what customers build.”
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