As it grew into a tech giant over its first two decades, Amazon came to be regarded as a sleeping giant in the digital advertising business, ceding the market largely to the duopoly of Facebook and Google. .Thank you for reading this post, don't forget to subscribe!
It’s now wide awake – and CEO Andy Jassy believes it has “barely scratched the surface” of the opportunity.
In its stellar third-quarter earnings report Thursday afternoon, Amazon said its ad services business grew 26% from the same quarter a year earlier, to $12 billion. (That outpaced a 13% growth rate for total revenue, which reached $143.1 billion.) Advertising is now more than double the size of $5 billion just three years ago, thanks to the NFL’s 2022 arrival . thursday night football As a Prime Video exclusive.
Last month, Prime Video also said it would start running ads on movies and shows, part of a more comprehensive effort to position the company’s multiple platforms as advertising vehicles. Amazon recently became an anchor tenant at NewFronts in New York, a springtime week of pitches by digital platforms to brand marketers held on the eve of traditional TV upfronts.
Speaking on the company’s quarterly earnings call with analysts, Jassy touted the success of the NFL, which has seen viewership grow 25% through the first six games this season. The executive also sees that the company is making progress operationally.
“We’re doing much better in terms of advertising than we were in our first year,” Jassy said, calling the NFL “an asset that’s really valuable.” …Advertisers want to be in front of customers” and most customers watch football. In its earnings release, Amazon said its NFL viewers are an average of 47 years old, which is seven years younger than those watching on linear TV.
Looking beyond the game, Jassy said Amazon’s nature as a tech company brings benefits to all ad buyers. “Most of our resources on the advertising side are in machine learning and building algorithms” that are designed to help improve targeting and provide insights about effectiveness, he said.
JC claimed that ads served with the support of these tools “perform better”. Advertising buyers evaluating their options are “going to choose the one with better results, better performance.”
Overall, he continued, “We’ve barely scratched the surface when it comes to figuring out how best to integrate video and commerce and advertising into groceries.” He said it’s “still quite early” for the company to move into advertising, “but it’s evolved well and we’re really focused on creating a great customer experience.”