EMarketer dials back Amazon predictions slightly

The global marketing intelligence firm now predicts that Amazon will get a 7.6% share of digital ad dollars, less than previously predicted.
Amazon

Last quarter’s results for Amazon showed that despite murmurs of it growing as an ad giant, ad revenue is still but a drop in the bucket for the e-commerce company.

Now, global marketing intelligence firm eMarketer has dialed back its forecast for Amazon’s global ad share slightly.

Previously, eMarketer had predicted that Amazon would take 8.8% of digital ad dollars in 2019. Now, it’s predicting share will reach 7.6% for this year. While it is still expected to rise consistently, up to just under 10% in 2021, it’s still falling below the 11% initially predicted by eMarketer.

That said, eMarketer still puts Amazon as the third-most prolific recipient of the digital ad spend pie. It’s well-ahead of its next-highest competitor, Microsoft, which is currently at 3.9% and expected to go down slightly to just over 3% by 2021. Verizon Media is next at 2.7%, and is also expected to see moderate losses.

That makes Amazon’s ad business almost twice the size of the fourth- and fifth-place finishers for digital ad spend.

Still, the company’s last earnings were called “disappointing” by numerous business and financial publications. Of the USD$63.4 billion in earnings for the quarter, net income fell short of expectations, briefly sending stock down. The company’s “other” category, which mainly covers Amazon’s burgeoning ad business, rose to $3 billion in revenue. That marked a 37% rise in the category.

But it pales in comparison to previous leaps in the advertising category; in Q4 2018, Amazon’s ad-encompassing “other” category had jumped by 95% year-over-year, prompting whispers from analysts that Amazon could potentially disrupt the “digital duopoly” of Google and Facebook.

While Amazon is seeing growth in its ad business, it’s still far from becoming a company predominantly focused on media; the “other” category continues to represent under 5% of the company’s total income.

Last quarter, Facebook reported $16.2 billion in ad revenue and Google a whopping $32.6 billion. While Amazon is still a long way from Facebook and Google’s ad strength, it is posting growth compared to those below it. The date for Amazon’s next quarterly has still not yet been revealed, but with its Q2 taking place in late July, it is expected in the coming weeks.

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