The advertising revenue of Amazon reached the 37.7 billion dollars in 2022, much lower annual growth than the channel has seen historically. From 2021 to 2022, Amazon’s ad sales grew just over 20%, notably slower than the 58% growth in 2021 and the 147% jump in 2020. This matches year-over-year increases in ad spending across social networks. social networks and paid search, suggesting brands and marketers are diversifying their ad spend, according to the report ‘Amazon Advertising Report 2023’ made by JungleScout.
Specifically, revenue from the advertising services business segment of Amazon accounted for 7.3% of Amazon’s total net sales in 2022, up from 6.6% in 2021. According to the study, while some brands and marketers are seeing lower returns on ad spend, those who sell in certain product categories are experiencing much higher ROAS.
Similarly, the study highlights that video ad spend and DSPs continue to acceleratealthough the spend on these offers is still lower than other Amazon ad products.
Precisely, some brands and sellers are seeing lower returns on their advertising spending, with the most significant declines in Sponsored Brands campaigns. Others, particularly in specific product categories, are seeing much higher returns on their investments. Among the types of advertising campaigns, Amazon Sponsored Products still represents the majority (78%) of advertising dollars.
The study also points out that the top 10 product categories by return on ad spend (ROAS) They are: Musical Instruments, Gadgets, Office Products, Video Games, Arts, Crafts & Sewing, Mobile Phones & Accessories, Electronics, Books, Patio, Lawn & Garden, and Industrial & Scientific.
Video ad spend accelerates
The interest and attention around the video and advertising of Demand Side Platform (DSP) continue to grow, but spending on these Amazon deals still lags behind that of legacy ad products like Sponsored Brands and Sponsored Products. Only 4% of total ad dollars went to display ads (Sponsored Display and DSP) in 2022.
As for the use of Amazon ads between brands and sellers By ad type, the report reveals that 55% of Amazon sellers are focused on testing new marketing tactics by 2023, and 80% of Amazon brands and sellers invest in advertising for your products.