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Amazon advertising revenue up 52% in 2020

8 April 2021
2683
2 min.
7
Amazon advertising revenue up 52% in 2020

Amazon's revenue

Amazon's digital advertising business will grow even more than the company's e-sales and cloud computing businesses in 2020, according to eMarketer. Although this Amazon business has a much smaller share of the US digital advertising market than Google and Facebook, analysts are voicing good projections for growth through 2023.

Amazon's digital advertising business (AMZN) has received a new high growth estimate for 2020 from experts at global research firm eMarketer.

Amazon shares, virtually unchanged since the start of 2021, rose in early trading on Wednesday.

Analysts at eMarketer gave investors further evidence of the e-commerce giant's strong growth in the US digital advertising market: amid a boom in online sales, Amazon's advertising revenue growth rate has outpaced that of its core segments e-commerce revenue and cloud computing company AWS. Amazon's share of the US digital advertising market rose to 10.3% in 2020 from 7.8% in 2019, Google's (GOOGL, GOOG) market share, in contrast, fell from 31.6% to 28.9%, Facebook (FB) showed more modest growth: from 23.6% market share in 2019 to 25.2% in 2020.

Forecast for Amazon: The company's share of the US digital advertising market will increase to 10.7% this year, with subsequent growth to 11.9% in 2022 and 12.8% in 2023.

Forecast for Google: Its share of the US digital advertising business will decline from 28.9% in 2020 to 26.6% in 2023.

While Facebook faces advertising targeting risks due to Apple's software updates (AAPL) and Google incurs high traffic acquisition costs (TAC) each year because it has to pay other tech manufacturers to have its search engine installed in their devices by default, Amazon is more independent.

Amazon places digital ads on its own marketplace, streaming video service Prime Video and its other services. In doing so, the company has the ability to track ads from display to conversion.

Cowen estimates that Amazon's advertising business could generate more than $85 billion in 2026, reaching Facebook's revenue levels within the next six years.

Companies7 in the news

Cowen
1 place
eMarketer
2 place
Facebook
4 place
Apple
6 place
Amazon
7 place
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