If you’ve ever shopped for literally anything on Amazon, it’s no surprise that it has a robust digital ad business catering to brands that want to promote products on its website and app.
What is surprising is that Amazon’s digital ad revenue grew 18% YoY to $8.76B in Q2 — more than analysts expected and outpacing Google and Facebook.
In fact, Facebook’s revenue shrank for the first time ever by 1.5%.
Why?
- Unlike the social media companies, Amazon isn’t affected by Apple’s privacy update, which lets iOS users opt out of targeted ad tracking.
- People on Amazon are already there to shop. Insider Intelligence analyst Andrew Lipsman told CNBC that Amazon is more likely to offer an ROI, key for brands worried about a recession.
- For brands, Amazon ads are 68% cheaper than Google’s and 44% cheaper than Facebook’s when comparing average cost-per-click.
Fun fact: Amazon also has a virtual product placement tool, meaning it can insert brands into its TV shows and movies in postproduction.
