Growth in Amazon’s ad business is slowing

Amazon

Growth within Amazon’s advertising business slowed considerably in the first quarter of 2019, as it noted 34% revenue growth to $2bn following previous quarters which achieved growth of around 60%.

Amazon reports its ad business performance under the “other” category, though that is predominantly composed of ad sales.

On a call with analysts, chief financial officer Brian Oslavsky hinted that advertising growth was higher than the 36% actual rate.

Its revenue was down across the business, achieving total revenue growth of 16.9%, the slowest growth it’s seen since the first quarter of 2015. In North America, it saw a 17% increase (versus 46% last year) and International growth dropped to 9% from 34% last year.

Online sales were up 10% year-over-year, to $29.5bn while physical store sales were up 1%, to $4.3bn.

Despite the slowdown in growth, the business is more profitable, with net income at a record $3.6bn for the quarter.

Amazon highlighted the growth of its cloud business Amazon Web Services which grew 41% on last year, delivering $7.7bn.

On the same day as its earning Amazon also revealed it had poached Andrew Saunders from Tastemade to head up its entertainment marketing division.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.