The advertising platform of Amazon, Amazon Adshas been one of the ‘trending topics’ of 2022 and everything indicates that it will continue to be so in 2023. If we had to summarize its evolution, we could say that last year Amazon’s advertising business reached an annual rate of almost 40,000 million dollars last year, ten times more than it was five years ago. Despite this growth, the Amazon advertising prices have been stable and slightly cheaper compared to 2021. The cost per click (CPC) The average in the United States was $1.06 in November 2022, up from $1.24 a year earlier.
The advertising business of Amazon also stands out over that of its other technological rivals Google and Facebook and it has been the one that has grown the most during the last three years. Amazon’s third-quarter results have lagged market projections both overall and in its cloud services division, but it did advertising billing expectations have improved.
The 9,550 million dollars (9,753.48 million euros) that the company has entered into this segment in 2022 have improved the data for 2021 by 25%, while the Google ad revenue, including all the properties of Google and YouTube, have increased only 2.5% to reach 54,400 million dollars (55,557.6 million euros). On her side, the facebook advertisingincluded instagram, has fallen for the second consecutive quarter, -3.7% year-over-year to $27.2 billion (27.78 billion euros). In the third quarter of last year, Amazon’s advertising business also grew faster than social media platforms like pinterest, Snapchat Y Twitter.
And it is that, what began as a basic functionality to promote products in search results has become a increasingly profitable business, both inside and outside of Amazon. Amazon advertising now includes dozens of ad types, technologies, data, and solutions for brands to reach consumers.
Strong commitment to Retail Media
In the coming years, Amazon will also continue its strong commitment to the retail media and will visibly continue to dominate the US scene. Since the e-commerce giant launched its advertising platform, the retail sector has been developing different solutions. However, for now, Amazon will continue to monopolize most of the investments in Retail Media in the next four years in the United States.
Specifically, if we look back, according to the study ‘Retail media ad spend in the US 2019-2026, by platform’ made by Statista, Amazon’s total advertising revenue in the US in 2019 was $10 billion. Since then, revenues have tripled and Amazon has been climbing to reach the elite of Retail Media. The company accounts for almost 80% of total retail media spend and closed 2022 with advertising revenue of $31 billion. It is expected that by 2026 these revenues will practically double and increase to reach 64,000 million dollars.
Another of the trends that will give a lot to talk about this year and in which Amazon has already focused is the social commerce. The company has taken cues from TikTok’s browsing style to launch a similar shopping experience within its app, and in December announced Inspire, a new short-form video and photo feed that lets consumers explore products and ideas and buy content created by influencers, brands and other customers. Thus, it will give users the option of knowing products that may interest them and they can buy within the electronic commerce platform. This function is intended to shift consumer attention away from apps like TikTokwhere brands have the ability to sell directly, in order to drive sales on Amazon.com.