Amazon's ad business soars to 10% of U.S. market, nudging $16bn
Boosted by Covid-induced digital acceleration, Amazon is threatening Google and Facebook's duopoly faster than predicted, taking more than 10% of the U.S. digital ad market in 2020.
What you need to know:
- eMarketer data suggests Amazon now taking more than 10% of US digital ad market.
- The firm's ad business grew 53% YoY to $15.7bn.
Amazon’s share of the $150 billion U.S. digital ad market has passed 10%, new data from research firm eMarketer suggests.
The e-commerce giant’s share of ad revenue notched 10.3% of the market in 2020, up from 7.8% in 2019. Meanwhile, revenue climbed 52.5% to $15.73bn per eMarketer estimates.
While Google and Facebook accounted for 28.9% and 25.2% of the market respectively, Amazon is quickly becoming a prime competitor. Crucially, it has purchase data, closing the loop between ad dollars and sales.
eMarketer predicts Amazon’s share will be nudging 13% by 2023, though many analysts would be unsurprised to see it take higher share more quickly: While its growth over the last year has been fast tracked by pandemic-driven behaviour change, those shifts are likely to be permanent. Google, it seems, could lose out.
“This is one of these situations where the pandemic accelerated something that was happening anyway,” Nicole Perrin, a principal analyst at eMarketer, told the Wall Street Journal.
“We are expecting pretty notable continued gains in share through at least 2023, specifically looking at the search side.”
The Australian digital ad market is dominated by Google and Facebook, with the Australian Competition and Consumer Commission (ACCC) estimating the duopoly trousers 81 cents in every digital ad dollar – and that was pre-pandemic.
While Amazon's presence in the Australian market is much less mature than its US ad business, the firm is aiming to make far deeper inroads with both large and small brands.
Earlier this year, the company acquired Sydney-based Selz, an e-commerce platform that helps small businesses build out digital stores and is seen as an alternative to Shopify.
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