Amazon is already well-known for its rising dominance of the ecommerce market[1] and other fast-growing segments like AWS, its leading cloud computing platform — now, their search advertising business is booming as well.
In fact, it’s on track to generate more than $10 billion in advertising revenues[2] over the next year, a nugget found within Amazon’s most recent third-quarter financial results. In September, the global powerhouse unified its disparate ad products and systems under one brand, Amazon Advertising.
The accelerating growth of Amazon’s ad business[3] poses a threat to established digital advertising platforms including Google[4] and Facebook. The Seattle-based internet giant is forecast to push past Verizon’s Oath and Microsoft to the number three position[5] behind the “duopoly” of Google and Facebook with market share of more than four percent this year. In comparison, the duopoly’s share of new digital ad dollars is declining, forecast to garner only about 48% of new ad spend in 2018 vs. 73% two years ago.
According to a recent Bloomberg TV segment[6] on Amazon’s increasing share of total online ad spend, 54 percent of product searches across the entire internet now occur on Amazon, said Jumpshot CEO Deren Baker. Sponsored ads on Amazon have increased during the last 18 months, with clicks on product searches via sponsored ads on Amazon rising from three to seven percent. Two thirds of these clicks are on the first page of search results, said Baker, increasing pressure to run sponsored ads up against competitors and Amazon’s private labels.
In another extension of its full-court press to rapidly expand its online advertising business, Amazon is now testing[7] a pilot program that