Amazon’s US Ad Revenue Is Eating Up Facebook and Google

According to the latest research by eMarketer, Amazon is taking a larger share of US digital ad space.

Sanmit Amin - Author

Sep. 20 2018, Published 8:05 a.m. ET

uploads///Amazon net income

Amazon’s ad business is growing rapidly

Amazon (AMZN) operates its core e-commerce business on very thin margins. However, its cloud computing and advertising businesses are not only lucrative but also growing rapidly.

That has led to a surge in Amazon’s net income in recent quarters, as you can see in the graph below. In the second quarter, its ad business grew 129% year-over-year to $2.19 billion.

Lately, Amazon has been increasing the number of sponsored ads related to a user’s search on its platform. Users are increasingly using Amazon rather than Google for their product searches.

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eMarketer expects Amazon to be third in US digital ad dollars

According to the latest research by eMarketer, Amazon is taking a larger share of US digital ad space. eMarketer revised its annual US digital ad estimates and now expects Amazon to rake in $4.61 billion in ads this year in the United States compared to the previous projection of $2.89 billion.

eMarketer expects Amazon to take third place in the space this year, behind Alphabet’s (GOOG) Google and Facebook (FB).

Amazon is now expected to corner 4.15% of US online ad dollars. Facebook’s and Google’s market shares are estimated to decline. By 2020, eMarketer expects Amazon to eat up 7% of the total US digital ad dollars.


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