Amazon’s advertising growth poses no immediate threat to Facebook and Alphabet, according to new research, which indicates that growth will augment rather than undermine the likes of Facebook and Alphabet.
A rapidly expanding digital advertising market will leave plenty of room to accommodate a new big beast according to Jefferies analyst Brent Thill, with the sector expected to grow from around 50% of all advertising today to 60% by 2022.
As a key player in this expanding pool Amazon is expected to benefit commensurately with Thill confidently predicting that its ad revenues will grow at a compounded annual rate of 35% between 2018 and 2022 to hit $33bn.
Thill said: “We do not believe that market share will be taken at the expense of Facebook and Google, which should each grow as a percentage of digital advertising spend through 2022. We believe Facebook, Google and Amazon will take share from smaller players as well as an incremental share from the offline-to-online transition.”
Despite the growing importance of the sector to its bottom-line Amazon does not divulge its advertising income specifically, instead of rolling it into an ‘other’ category, which totaled $10bn in 2018. The bulk of this is thought to arise from advertising however with the equivalent top-line figure for 2022 expected to come in at $36bn.
Over the next four years the combined market share of Amazon, Facebook and Alphabet is predicted to increase from 65% to 72% by Jefferies.