- Amazon saw promoting sales grow 26% year-over-year for a complete of $12 billion within the Q3 2023 period ended Sept. 30, per an earnings release. The company’s overall net sales increased 13% to $143.1 billion, higher than analyst expectations.
- Executives attributed the ad growth to sponsored products, a lower-funnel ad product that continues to be strong amid a tricky economic climate that has caused advertisers to be more cautious of top-of-funnel ad products.
- President and CEO Andrew Jassy said Amazon has “barely scraped the surface” in its efforts to integrate promoting into video, audio and grocery because the segment stays a growth driver for the corporate.
Amazon continues to outpace its major competitors within the digital promoting world, with a 26% growth rate that’s higher than it saw last quarter and better than that of Google (11%) and a surging Meta (23%). CEO Jassy called out Amazon’s particular abilities and offerings as what has helped it separate itself from the pack.
“We have fared pretty much partly because we’ve various owned and operated properties which have very large volumes that advertisers and types need to get in front of. Even in a harder economy, there’s going to be numerous e-commerce purchasing. So people need to be in front of our customers in our marketplace,” he said on the earnings call.
For example, “Thursday Night Football” on Prime Video is seeing rankings which might be 25% higher than they were a yr ago, helping Amazon do “a lot better on the promoting side,” Jassy said, as brands seek to succeed in an engaged audience of about 13 million customer per week.
As previously announced, Prime Video will feature limited ads starting in early 2024, a move that might help further speed up Amazon’s ad growth. Still, the corporate is hoping to have “meaningfully fewer ads” than linear TV and other streaming TV providers, which could help it maintain subscribers amid a crowded streaming landscape. However, the initial pricing of its latest Prime Video ad tier has received pushback from media buyers, Ad Age reported this week.
Amazon continues to lean into machine learning to enhance the relevancy of its sponsored product ads, which Jassy said is contributing to higher ad performance for advertisers and will make its offering more attractive to advertisers who need large ad volumes but face budget challenges. As areas of future ad growth, Jassy said the corporate has “barely scraped the surface” of integrating promoting into video, audio and grocery. The executive also talked up its move to put sponsored products on third-party sites akin to Pinterest, Hearst Newspapers and Buzzfeed.
In one other move to draw advertisers, the corporate this week at its annual UnBoxed conference unveiled a spread of promoting products, including a latest data clean room tailored to publishers and a generative artificial intelligence (AI) solution for enhancing campaign assets.
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