Amazon Forecast to Be No. 3 Digital Advertising Player in 2018

Lloyd Doyle
September 20, 2018

EMarketer predicts Amazon will generate $4.6 billion in USA online ad revenue this year, up substantially from the $2.9 billion eMarketer had forecast in March.

Online retail colossus Amazon is gaining ground in the U.S. digital advertising market as the dominance of Google and Facebook erodes, according to an eMarketer forecast released on Wednesday.

"People are switching much of their purchasing to online channels, which Amazon is of course driving and benefiting quite heavily from", said Monica Peart, senior forecasting director with eMarketer.

Amazon's bullish run of sentiment continues apace in the latest ad forecast to be compiled by eMarketer, which elevates the ecommerce giant to third place behind Google and Facebook in its ranking of USA digital ad platforms.

While Amazon has a long way to go to truly rival Google and Facebook's ad earnings, its ad business is still relatively young, with lots of runway ahead.

The market tracker predicted that Amazon will take in $4.61 billion in online advertising revenue as its share of the U.S. market grows to 4.15 percent, for the first time surpassing Microsoft and Oath, a subsidiary of Verizon Communications.

A caveat: A big reason that Amazon's ad revenue is showing huge growth is because of an accounting change, effective January 1, 2018, under which the company's advertising services are now classified as revenue rather than cost of sales.

Amazon is also reaping the rewards of an increase in product searches started on the retailer's website, instead of on Google or another search engine, she said. With digital ads, Amazon is capitalizing on its marketplace model which hosts millions of third-party sellers. "That's a major reason that we might have underestimated what kind of growth would come through by the first half of the year". Earlier, eMarketer said they had been classified as cost of sales.

Existing Amazon merchants and brands are among the customers buying ads on the site, as well as authors and other advertisers targeting Amazon customers. The report estimates Google's ad revenue share for the year at 37.14 percent and Facebook's at 20.57 percent.

Other reports by Iphone Fresh

Discuss This Article