Amazon’s next big business: Advertising

New Ideas in MarketingEssential news for marketers, summarised by YouGov
August 02, 2021, 3:56 PM UTC

BMO Capital Markets research found advertising now accounts for 43.9% share of Amazon’s stock value, just behind AWS at 46.3%.

Analysts expect Amazon’s advertising business will overtake AWS (Amazon Web Services) as the most valuable part of the business. BMOs report pointed out that Amazon’s advertising revenue went up by 80% as many brands advertising on the platform to capitalise on the consumer shift to digital retail last year.

Wall Street analysts estimate the shareholder value of Amazon’s advertising business is worth nearly five times as much as its retail business. Ad spend was also shifting away from sponsored brands and sponsored display formats.

A separate Jungle Scout study found sponsored products ads make up 77% of Amazon Advertising, while brands drive only 20%. The Jungle Scout study found a significant shift in ad spend away from sponsored products to newer and recently updated products on Amazon.

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