Amazon increases digital ad market share at Facebook and Google’s expense
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Amazon increases digital ad market share at Facebook and Google’s expense

Former CEO of WPP advertising group, Martin Sorrell, famously said that Amazon “kept him up at night”. He was referring to the platform’s potential as an ad space, and also to the way that the retail giant may refuse to “play ball” with existing providers. Digital advertising is, currently, still a two-player game between Google and Facebook (which Sorrell described as “frenemies”) – but Amazon is making in-roads into the market.

Amazon’s share price has appreciated by 64% so far this year

graph 2009 amazon

SOURCE: Yahoo Finance

According to research firm EMarketer, Amazon’s online ad business is growing far faster than expected. Previously, they forecast that the ecommerce giant would see $2.89 billion in ad sales this year – now, they’ve revised that figure to be $4.61 billion. That represents around 4.2% of the total digital ad market. This increase is due to an accounting change at Amazon, but also increased demand, EMarketer says.

The extra market share comes at the expense of the two heavyweights in the market, Google and Facebook. In 2017, these firms held 59% of the digital ad market between them – this year, it’s dropped to 58%. Monica Peart, an analyst with EMarketer noted that Amazon offers something different from its rivals: while Facebook and Google are great for brand building, Amazon is closest to customers at the moment of purchase. In other words, if they’re on the platform, they’re already looking to buy. She added: “Advertisers are looking for a third option that ties purchase data directly to the advertisement.”

Timothy Seward, CEO of ecommerce marketing firm ROI Revolution, concurs. And he added that Amazon’s move into groceries is sending ad spend up, as big brands like Coca Cola – who may not make huge sales online – are buying up space simply so they can maintain brand awareness as retail shifts further online. He said: “Amazon isn’t just a web store, it’s also a marketing channel. All of the major brands usually sold in Walmart and Kroger have to be on there.”


Dominion holds Amazon in its Global Trends Ecommerce Fund.

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