It is generally accepted that the American online advertising market has long been divided between Google and Facebook, and that it is simply impossible to seriously squeeze them in this segment. Is it really? The best answer is Amazon’s ad business statistics for the past year.
So what’s Amazon up to with online advertising?
On April 6, eMarketer, an American company specializing in researching new trends in digital marketing, media and commerce, published an interesting piece.
In 2020, the tech giant created by Jeff Bezos increased its online ad revenue to $ 15.73 billion, up 52.5% over 2019. In addition, the company’s share in this segment also increased – from 7.8% to 10.3%.
Experts point out that search advertising and display advertising at retail sites have become the main sources of income. They make up about 89% of all Amazon advertising business.
How is the US digital advertising market distributed?
In 2019, the shares in this sector were distributed as follows: Google received 31.6%, Facebook – 23.6%, Amazon – 7.8%, other companies – 37%. Within a year, the indicators changed.
The acceleration of growth in the share of Amazon became more noticeable – to 10.3%, the slowdown in the growth of the corporation of Mark Zuckerberg – to 25.2% and the decrease in the share indicator of the brainchild of Sergey Brin and Larry Page – up to 28.9%.
What are the reasons for Amazon’s pickup in turnover?
The pandemic and quarantine restrictions in the United States have made this online marketplace super-demanded and popular. This has impacted not only online sales and e-commerce revenue, but also key metrics in digital advertising.
Analysts note that American users are less and less likely to turn to the Google search engine to find a particular product, and more and more often decide to search directly on the website of the trading platform. In addition, advertisers couldn’t resist the impressive conversion rates and cost per impressions from Mr. Bezos’s IT empire.
What predictions did eMarketer make for Amazon?
Experts from the research firm are confident that Amazon will continue to gain momentum in both e-commerce and the US digital advertising market. According to eMarketer forecasts, this year the share of this company in the advertising business will increase to 10.7%, in 2022 – up to 11.9%, and in 2023 – up to 12.8%.
As for the future of Google, analysts predict corporations will gradually but steadily lose their positions. The forecast is as follows: from 28.9% in 2020, the share will decrease to 26.6% in 2023.
How does Amazon stock react?
On April 7, following information from eMarketer, Amazon (NASDAQ: AMZN) rose 1.72% to $ 3,279.39 per share. The next day, quotes added another 0.61%, reaching the level of $ 3,299.3.
The tech giant gained 6.63% in April. As for the dynamics for 3.5 months of this year, it is positive, but minimal – 1.3%.
RoboForex analyst, Maxim Artyomov, on Amazon shares
In the second half of 2020, Amazon stock traded in a sideways channel and did not show significant fluctuations. There were minor corrections and price spikes, while the wave fluctuations gradually decreased.
Over the current year, quotes have gradually begun to recover their positions and at this stage are moving to the area of the resistance level. If the company continues to progress in positive dynamics, then there is every chance that the upward trend will continue to develop.
In March, the quotes rebounded from the 200th Moving Average, which in turn indicates the increasing strength of the Bulls and the continuation of the upward dynamics. According to technical analysis, the price has formed a “Wedge” pattern, and a breakdown of resistance will become an additional signal for growth. The target for growth at this stage is the maximum value of $ 3546.35, which can be updated in the near future.
Summing up the result
eMarketer reported that Amazon increased its ad revenue by 52.5% and its market share to 10.3% over the past year. Experts note that the corporation is winning back positions from Google and other smaller structures.
Experts predict that by 2023 the share of this IT company in the online advertising segment in the United States will reach 12.8%. Analysts cite search advertising and display advertising at retail outlets as the main sources of revenue in the Amazon advertising business.
What else to read about the promotions of IT corporations on the R Blog?