Amazon’s advertising business continues to grow rapidly because it is now one of the company’s main sources of revenue.
In the company’s second-quarter earnings report, Amazon stated that its “other” category sales were $7.9 billion, an increase of 87% from the same period last year and a 14% increase from the first quarter of 2021.
According to the earnings report, Amazon did not release specific advertising financial data, but its “other” category “mainly includes sales of advertising services and sales related to our other service products.”
The 87% growth rate is significant; it was 41% in the same period last year. Other Amazon businesses are not growing fast—for example, sales in the online store category increased by 16% in the second quarter of 2021, and Amazon Web Services sales increased by 37%.
According to the indicators for the second quarter of 2021, the “other” category now has an annual business value of close to US$32 billion. Perhaps more importantly, advertising is a highly profitable business that helped drive Amazon’s profit growth to $7.8 billion last quarter.
In contrast, Amazon’s subscription service category (including Prime membership revenue) also reported $7.9 billion in revenue. This is an increase of 28% over the same period last year.
Even so, Amazon only has a 10% share of the US digital advertising market. E-marketer, Although its share has been growing in recent years.
Facebook and Google-which together have more than 50% of the digital advertising market share-have also seen substantial growth in their respective advertising revenues, as have other tech giants. Microsoft’s LinkedIn said this week that its quarterly advertising revenue in the most recent quarter exceeded $1 billion for the first time, an increase of 97%.
Aksios A report on Thursday said that pandemic-driven trends such as accelerated digital adoption and a slowdown in the advertising market in the second quarter of 2020 have contributed to the recent increase in advertising sales.
Amazon CFO Brian Olsavsky pointed out that part of the year-on-year increase in advertising was due to a slowdown a year ago. “But most of them are all the new products and features we can launch for our customers, as well as more demand for advertising and higher bid rates and click-through rates,” he said on Thursday.
Amazon generates advertising revenue from a range of places, but most of it comes from charging companies to promote their products on Amazon’s online marketplace. As Amazon’s online shopping business surged during the pandemic, so did the advertising machines.
Olsavsky added that the advertising business is part of the company’s “flywheel,” and pointed out that Amazon wants to help customers find products they wouldn’t otherwise see.
Amazon also earns advertising revenue through its streaming media platforms such as Twitch or Fire TV.
Its advertising-supported IMDb TV streaming service is just Sign the license agreement Cooperate with Universal Pictures Entertainment Group. Amazon recently reached a 10-year agreement to broadcast the NFL Thursday night football game on Prime Video.
Amazon said its advertising team launched more than 40 new features and self-service features last quarter, and expanded advertising-related products in Australia, Europe, India, Japan and Saudi Arabia.