Amazon’s ad business continues to jump from strength to strength after the company reported ‘other’ revenues of $3.4bn, predominantly drawn from advertising, during the fourth quarter of 2018.
The bumper figure throws into sharp relief the progress made by Amazon at eating into the margins of market leaders Facebook and Google courtesy of its strengths in branding-oriented campaigns, with the comparable third-quarter figure standing at just $2.5bn.
In annual terms, the growth is even more impressive with revenue surging 97% from the $1.7bn generated in the fourth quarter of 2017. Moreover, analysts are confident that this time of plenty will extend to 2023 when Amazon could be raking in as much as $38bn in ad revenue according to Pivotal Research.
Over the year as a whole Amazon generated over $10bn, well ahead of the $4.6bn estimated by eMarketer as recently as September, when Amazon rose to become a distant third behind Google and Facebook.
Amazon faces unexpected headwinds in other areas, however, prompting it to temper expectations for the first quarter of 2019. It now anticipates sales to expand by between 10 and 18%, slightly below analyst expectations, despite recording record sales during the all-important Christmas period.
In 2017 Amazon confidently predicted that advertising would become a 'meaningful' contributor to its bottom line.