Amazon made nearly $5 billion from ads in Q3

While its commerce is obviously benefitting from the pandemic, advertising is also on a major growth trajectory.
Amazon

There was a lot for Amazon to cheer about at the release of its Q3 figures on Friday. The tech giant surpassed analyst estimates on almost every major metric, including revenue ($96.15 billion, up 37% and more than $3 billion higher than analyst consensus) and net income ($6.3 billion, nearly tripled from Q3 2019).

One of those highlights was its advertising business. Advertising represents the lion’s share of Amazon’s “other” segment, and it’s now showing even more accelerated growth. It was only a couple years ago that media marvelled at Amazon’s advertising business taking in $2 billion. This time around, the “other” segment took in USD $5.4 billion (representing a 54% lift) and the company has stated that “nearly $5 billion” of that was specifically from advertising.

KeyBanc analyst Edward Yruma wrote in his analysis that advertising is now a “key driver of profitability” for the company, having turned traffic generated from Amazon Web Services into “valuable real estate for advertisers.”

In addition to the ad business, it also pulled in $6.58 billion from subscription services, including Prime memberships, representing a lift of 33%.

The company is predicting that revenue will grow overall in Q4, with CEO Jeff Bezos pointing out a trend that other companies (like Pinterest) have also noted: that holiday shopping and search has started early, and that this could be an unprecedented holiday season. While the company is predicting between $112 and $121 billion in revenue next quarter, it hasn’t specified what it predicts for specific segments.