Amazon fuels advertising spike with Prime Day event

Amazon fuels advertising spike with Prime Day event

Amazon is expected to ride a significant uplift in advertising revenues this week as merchants scramble to position themselves to take advantage of the online retailer's annual Prime Day sales event.

The promotion has become a significant revenue raiser for the e-commerce giant as it claims a growing slice of the lucrative digital advertising market, with marketers forced into competitive bidding wars for keywords to ensure their products rank at the top of search results.

In this way Amazon can drive up ad spending by as much three-times its regular rate to capitalise on the millions of Amazon Prime members expected to flock online to sniff out deals on everything from bluetooth speakers to homewares.

Amazon is also profiting from a hike in its ‘Lightning Deals’ levy from $500 to $750 and is increasingly promoting its own in-house products, shrinking the playing field in which other sellers can compete.

First launched in 2015, Prime Day has grown rapidly to the extent that it is expected to reach $7.5bn in advertising revenue this year, representing 3.2% of total group sales, with 100m people globally signed up for the premium subscription service.

This underscores the new-found importance of advertising to Amazon, although its overall share of the US digital ad market remains miniscule at just 2.7% – far behind the 37.2% market share of Google and 19.6% claimed by Facebook.

Despite its name Prime Day stretches for 36 hours and will begin on 16 July at 15:00 ET.

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