- Amazon’s revenue derived from promoting rose 19% 12 months over 12 months to $14.33 billion in Q3, in line with an earnings statement. The results were consistent with analyst expectations but marked a deceleration in the speed of growth from the year-ago period.
- The e-commerce giant this 12 months has focused on expanding its full-funnel marketing capabilities, introducing ads to Prime Video in January. The streaming service is within the midst of its first “broadcast season” after its upfronts, or period of advance negotiations with advertisers, within the spring.
- Like other digital ad platforms, Amazon has recently released numerous tools for advertisers which can be powered by generative artificial intelligence (AI). AI development carries steep costs but could welcome more ad activity and draw a greater variety of advertisers to Amazon.
Amazon’s ad sales segment stays a force to be reckoned with while not quite growing at the identical clip it once did (26% YoY growth in Q3 2023 versus 19% YoY growth for probably the most recent financial period). The company’s promoting gains met Wall Street’s estimates following a rare miss in Q2.
Retail media promoting, including sponsored product listings that surface on Amazon’s sprawling e-commerce marketplace, proceed to be a growth driver due to a big advertiser pool. Amazon is working to enhance ad relevancy and introduce additional optimization controls on this area, CEO Andy Jassy said on a call discussing the Q3 results with analysts.
Amazon’s Q3 earnings report overall impressed investors on earnings and revenue, though capital expenditures jumped a staggering 81% YoY to $22.6 billion, a hike underpinned by investments in generative AI.
Advertisers have received more bells and whistles as a results of the AI spending spree. Amazon in September debuted a tool that quickly converts product images into video ads with generative AI. Video is a costly and time-intensive promoting format to supply by hand, and the offering could gain traction with small- and mid-sized marketers that wouldn’t have deep pockets but depend on Amazon to drive transactions.
Amazon’s video generator follows a picture generator released last 12 months that may create a high volume of campaign assets with the clicking of a button. At its annual UnBoxed conference last month, the corporate also unveiled an AI-powered solution for generating audio ads that comes at no additional cost to U.S. advertisers using Amazon’s demand-side platform.
Amazon has united its AI ad products under a creative studio that aids with marketing efforts across platforms including Amazon.com, Prime Video and Twitch.
“[We’re] continuing to support brands of all sizes with our generative AI-powered creative tools across display, video and audio, including our video generator that uses a single product image to curate custom AI-generated videos,” said Jassy during yesterday’s call with investors. “While we’re generating quite a lot of promoting revenue today, there stays considerable upside.”
Other digital ad platforms are busy trumpeting their AI offerings for advertisers. Reporting its Q3 earnings earlier this week, Meta called out growing traction for generative AI image and text generators. More than 1 million advertisers have used such offerings to create greater than 15 million ads up to now month, CEO Mark Zuckerberg said, echoing Jassy’s comments that there may be “more upside” to return.
Amazon also continued to tout progress for its crack into promoting on Prime Video, a streaming service that hosts desirable live programming like NFL “Thursday Night Football,” together with original movies and TV shows. Amazon earlier this 12 months placed on its first upfronts, a pitch to the promoting community to lock in deals around upcoming video content. The company surpassed its goal of securing $1.8 billion prematurely commitments from advertisers, in line with media reports.
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