Amazon's ad growth poses no immediate threat to the digital duopoly, says analyst
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.
Amazon Advertising to augment not undermine 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.
Content created with:
Amazon
Find out more