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Amazon makes bank from marketplace seller ads

The giant retailer’s advertising segment is leaving its other sectors in the rearview mirror.
The post Amazon makes bank from marketplace seller ads appeared first on The Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Yellow cogs of a wheel with 'online marketing' written on them in black lettering

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Scorching growth in advertising revenue appears poised to propel retail titan Amazon (NASDAQ: AMZN) over $100 billion in quarterly revenue for the first time in its history, according to reporting by PYMNTS.com and The Financial Times. Considering the year as a whole, $21 billion of the company’s revenue is expected to come from ads, skyrocketing 47% year over year, FactSet data indicates.

The Financial Times also says Amazon’s swift advertising growth is outpacing all of its other major segments, including its Amazon Prime subscription service and its retail sales. While these areas may still be making more money, their growth is much slower. Amazon has posted powerful gains this year as lockdowns related to COVID-19 devastated America’s small businesses, which were typically not deemed “essential,” while Amazon was allowed to operate unhindered, gaining immensely from the switch to e-commerce.

Amazon’s advertising growth has been enough for it to start taking market share from Alphabet‘s Google, formerly the undisputed monarch of online product searches and advertising. According to The Financial Times, eMarketer analyst Andrew Lipsman asserts there is a lack of general “recognition for just how big of an advertising business Amazon is on the way to creating.”

According to Amazon’s head of investor relations David Fildes during the company’s third-quarter conference call, Amazon is looking to streamline registration, setup, and use of its advertising in the future. He also noted Amazon is in “a unique position to be able to provide measurement services that help all these brands sort of understand the impact” of their advertising with direct data, rather than advertisers needing to tease information out of obliquely related web searches as with Google and other search engines.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Rhian Hunt has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Amazon makes bank from marketplace seller ads appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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