Amazon 's advertising business is going full steam ahead, although it still lags behind the undisputed leaders in the online advertising universe: Google and Facebook. Even so, the e-commerce giant has a significant advantage in this market compared to its competitors: few know better than Amazon whether an advertisement leads to a purchase or not.
This summer, when the world was watching Jeff Bezos' space adventure , many forgot that Amazon had a much more earthly challenge ahead of it. The e-commerce business seems close to reaching its (apparently not infinite) limits of growth. Gone are the darkest months of the pandemic when people were betting everything on online shopping.
Fortunately, and given such bleak prospects, it is extraordinarily positive that Amazon is much more than a retailer. AWS, the company's "cloud" division currently led by Andy Jassy, is currently Amazon's most profitable business, which also increasingly fills its coffers through advertising . The multinational's advertising revenues climbed by 87% during the second quarter of the year.
Amazon steals (slowly but surely) market share from Google and Facebook
Amazon continues to bite into the duopoly formed by Google and Facebook and currently has 11% of the digital advertising market in the United States. Google, for its part, swallows up 29% of that market and Facebook has a 25% share.
Advertisers particularly like Amazon’s advertising platform for the exceptional accuracy of the metrics it brings to the table. With over 300 million active users in every corner of the planet, Amazon knows much better than Google and Facebook when an ad is or isn’t translating into a transaction.
An advertiser who relies on Amazon's advertising platform can be relatively confident that their ads will not continue to maliciously pursue someone who has already purchased the promoted product some time ago.
At a time when media budgets are increasingly tight and third-party cookies are on the verge of extinction, CMOs prefer to invest the money they spend on advertising in channels where profitability is particularly high, such as Amazon.
Amazon is also currently benefiting from the new privacy policy introduced by Apple in iOS jordan number data last June. Since this privacy policy came into effect, iPhone users have the power to decide for themselves whether or not the apps installed on their device can track their behavior for advertising purposes.
Facebook has protested in an extraordinarily vociferous manner against this new privacy policy , which inevitably reduces the effectiveness of its advertising. Not surprisingly, in the United States, users only agree to tracking in 25% of cases, according to a recent study by Branch.
Perhaps that is why some advertisers are already withdrawing their budgets from Facebook to entrust them to Amazon since the update in the privacy policy on iOS.
Google has been less alarmed (at least publicly) by Apple's new privacy policy. However, the Mountain View company has to fear Amazon in another, no less sensitive segment: search. According to various reports, 63% of online shoppers visit Amazon with the ultimate goal of looking for new products. And as a result, Google loses quite a bit of "first-party" data to Amazon.
Both Facebook and Google are trying to bridge the gap between clicking an ad and making a purchase. Both companies are working with software providers like Shopify to create closed ecosystems where the checkout happens on their own platforms. The problem? Amazon has had that ecosystem for years (and its reach is only growing).
It is also worth noting that Amazon is already betting on personalized advertising on Twitch and Prime Video . Amazon may have reached its peak as a retailer, but as a media company the American multinational has a prosperous future ahead of it thanks to its buoyant advertising business.