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Why Amazon’s Digital Ad Revenues Could Surge

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Ad holding company willing to spend with Amazon

While Alphabet’s (GOOG) Google and social-media giant Facebook (FB) currently hog most of the US digital ad revenues, this situation could change soon. Ad holding companies are looking for a third force in order to break this duopoly, and Amazon.com’s (AMZN) huge user base and its colossal consumer data network make it an attractive bet for ad holding agencies.

Amazon currently controls a small share of the total digital ad revenues. However, according to the Wall Street Journal, ad holding companies like Publicis (PUBGY), Omnicom (OMC), and WPP are collectively willing to increase their ad spending with the e-commerce giant to over $800 million.

According to the Wall Street Journal, WPP will spend $200 million with Amazon, while Publicis is willing to spend ~$300 million in 2018, up from $200 million this year.

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Amazon’s digital ad revenue is surging

Amazon could also potentially attract huge digital revenues through its voice assistant Alexa, which is likely to be installed in many devices, including Amazon’s Echo. The tech giant is likely to have Alexa speak out ads.

According to eMarketer, Amazon is the fifth-largest generator of digital ads in the US. According to the research firm’s estimates, the tech giant’s digital ad revenues will reach nearly $1.7 billion. While this is a fraction of the amount that Google and Facebook are generating, the e-commerce giant’s ad revenues are growing very quickly at 48.2% in 2017, according to eMarketer’s estimates.

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