Amazon’s Secret Weapon Its Massive Advertising Business




When you think of Amazon, you likely think of its massive marketplace where you can buy almost anything and get it the next day. You likely didn’t know that Amazon is also one of the largest sellers of ads in the world.

In 2022 Amazon sold almost $40 billion in advertising. That is bigger than the global newspaper industry did in 2022. This all comes from a report by Benedict Evans, who has been tracking Amazon’s growth in the advertising industry.

Much like Roku, Amazon sees its devices and other services as ways to sell products and sell ads. Amazon leverages its line of Fire TVs, smart speakers powered by Alexa, Kindles, and more to lock customers into its ecosystem.

This buy-in that keeps customers looking at Amazon’s screens also allows Amazon to sell a huge number of ads along with products. This has turned Amazon into one of the largest advertising businesses in the world.

So where are these ads showing up? You can find Amazon ads on the lock screens for their Kindles and tablets. You will see ads on your Echo Show display. Ads on your Fire TV’s home screen and even when you stream free ad-supported movies and TV shows. You will also find Amazon ads scattered throughout Amazon’s website as banner ads or sponsored search results.

Ads have long allowed Amazon to sell products on the cheap and hope to make it up when customers watch the ads. Amazon has a long history of extremely low prices for Fire TV, Fire Tablet,s Echos, and more. This expands the number of people watching their products, allowing them to sell more ads and make more money.

Amazon is not alone in this push to make money from ads. In the world of streaming, Roku has become one of the largest ad companies in the world. Roku’s cheap devices and ad-supported services like The Roku Channel help Roku make money off of cheap streaming players.

Other companies have recently jumped on the ad-supported bandwagon. Disney+, Paramount+, HBO Max, and more have all recently launched ad-supported versions in order to offer their products at a lower point by supporting them with ads.

Recently though, there have been some strong headwinds in the world of ads. Many advertisers have cut back ad spending being the main issue. The other issue now is there are more places than ever looking for ad inventory. This growing number of options on streaming services, websites, games, and more has driven down the price of ads hurting many companies that count on ad revenue.

For now, it will be interesting to see what happens with Amazon’s ad business, but for now, Amazon shows no signs of slowing down its growth.

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