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How Big Is Amazon’s Advertising Business?

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Feb. 13 2019, Updated 9:01 a.m. ET

Amazon’s ad revenue projected to hit $38 billion

Amazon (AMZN) doesn’t break down its advertising revenue as Google (GOOGL), Facebook (FB), and Twitter (TWTR) do. Instead, the company reports its advertising revenue under a category called “other,” which mostly consists of advertising sales but also includes revenue from other service offerings. Amazon’s other revenue grew to more than $10 billion in 2018, more than doubling from the previous year.

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According to estimates by Pivotal Research cited by Business Insider, Amazon’s pure advertising revenue was $9.0 billion in 2018 and is poised to grow to $38 billion by 2023. Google, Facebook, and Twitter generated $116.3 billion, $55 billion, and $2.6 billion in advertising revenue, respectively, in 2018.

A $427 billion revenue opportunity

Amazon’s vast audience of more than 300 million consumers globally, extensive data on consumers’ purchasing habits, and consumers’ preference to start their online product search on marketplaces are helping Amazon attract more ad spending. And the opportunity ahead is enormous. Worldwide spending on digital ads hit $273.3 billion in 2018 and is poised to grow to $427.3 billion by 2022, according to eMarketer estimates.

But Amazon is not the only retailer looking to capture advertising dollars. According to a Bloomberg report, traditional retailers like Walmart (WMT), Target (TGT), and Kroger (KR) have watched Amazon build a successful advertising business and are looking to do the same with the hope of making more money from their customers beyond just selling them items.

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