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News 4 Feb 2022 - 3 min read

Amazon is now a US$31 billion a year advertising company

By Sam Buckingham-Jones - Deputy Editor
Amazon iStock photo

Advertising formed seven per cent of Amazon’s overall revenue in Q4 2021, but annually its size dwarfs most advertising businesses besides Google and Facebook.

Amazon has given the world a peek under the hood of its massive advertising company, disclosing for the first time the exact revenues it sees from ads. Spoiler: A lot. One industry commentator pointed out Amazon’s ad revenue is the same size as the entire global newspaper industry’s ad revenue.

What you need to know:

  • Amazon has released the revenue it makes from advertising as a separate line item in its Quarterly Results for the first time ever: US$31.16b for the 2021 calendar year.
  • Previously, it obscured its advertising revenue in the “Other” category.
  • Amazon is cementing itself as a serious – and growing – rival to the Google/Facebook duopoly, who control more than 50 per cent of digital ads in the US.

Amazon has disclosed how much it makes from ads each year for the first time, revealing a US$31.16 billion (A$43.63bn) behemoth that grew 32 per cent year-on-year in 2021.

In its quarterly results update, Amazon included “Advertising services” on a separate revenue line, whereas it had previously been included in “Other”.

Advertising formed seven per cent of Amazon’s overall revenue in Q4 2021, but annually its size dwarfs most advertising businesses besides Google and Facebook. It is now:

  • Three times bigger than the advertising revenue of Microsoft (~$10bn in 2021)
  • 7.5 times bigger than Snap ($4.12bn in 2021)
  • 12 times bigger than Pinterest ($2.58bn in 2021
Amazon Revenue
The 'Advertising services' line did not exist in previous quarterly financial statements from Amazon. 

“I’m excited to continue innovating in areas like sponsored ads, streaming video, and measurement,” Brian Olsavsky, Amazon’s Chief Finance Officer, told analysts on a conference call. “Of course, advertising only works if we make it useful for customers. When we create great customer experiences, we build better outcomes for brands.”

According to eMarketer, Amazon accounts for 10.3 per cent of the US digital ad market, behind Facebook (29 per cent) and Google (29 per cent). Amazon’s surging growth, as well as Microsoft’s, which reported 23 per cent growth in ad revenue, could start to challenge the duopoly. Facebook’s parent company Meta lost 20 per cent of its share price earlier this week after its daily active users dipped for the first time in its history.

Amazon’s advertising business has not grown as quickly in Australia, but it is growing. It made $21.8m in Australia in 2020, according to its most recent financial filings. New filings are expected any day now.

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