Amazon’s advertising business is booming, recording a 22% increase in sales, reaching $10.68 billion in the second quarter. The surge outpaced analysts’ projections of $10.4 billion and signaled growth in the digital ad market.
Insider Intelligence reports that Amazon’s online advertising now comprises 7.3% of the global digital ad market. Though still trailing industry leaders Alphabet and Meta, who hold 28.8% and 20.5% of the market respectively, Amazon’s ad business is on the rise.
The growth comes as Meta’s core digital ad business faces challenges, partly due to Apple’s 2021 iOS privacy update. This update has reduced the effectiveness of Meta’s advertising, leading some retailers to shift their ad budgets to Amazon, where they believe they can generate more sales.
Amazon’s advertising growth presents a significant development in the digital ad landscape. The company’s rising influence and ability to attract ad budgets, especially from retailers, reflects a strategic positioning that leverages its dominant e-commerce platform. While Meta faces headwinds from privacy challenges, Amazon continues to capitalize on its extensive customer insights and eCommerce linkage.
This scenario underlines the importance of privacy considerations in digital advertising and the potential for platform-specific advantages. Marketers should keep a close eye on these trends as they continue to evolve.