Amazon made $2.5 billion from digital ads last year, according to advertising group WPP’s Sir Martin Sorrell. eMarketer had previously estimated a revenue of $1 billion. Although it’s not clear how Sorrell arrived at the figure, the company more recently made two big moves to add to its bottom line.
The company currently sells three types of advertising products: display ads for products, headline ads and sponsored product listings. According to Brian Nowak, the analyst at Morgan Stanley, Amazon’s ad business could even grow to $7 billion in revenue by 2020. That’s 4% of the US digital ad market and places the company more closely behind digital ad heavyweights Google and Facebook.
According to various executives, the eCommerce giant is apparently expanding its Media Group to include a self-service for ads which are served to consumers outside of Amazon.com. The tool would be particularly beneficial for agencies or brands.
In addition, it has bolstered its platform with simpler tools and easy-to-use bidding functionalities. It will also be launching an app programming interface for sponsored product ads.
It appears that, ultimately, Amazon plans to make its advertising available as part of a wider self-service programmatic offering. Indeed, earlier this summer, it rolled out Advertiser Audience which enables brands to match their audiences and build audience segments based on Amazon data.
The move to bolster its self-service features offers the obvious benefits for the company, namely more ads equaling more revenue.
It is clear that Amazon is well positioned to grow its digital advertising business. Analysts believe that this will be a priority for Amazon right now. If so, the company certainly stands a good chance.