- Amazon’s revenue derived from promoting increased 18% yr over yr to $17.29 billion in Q4 2024, in accordance with an earnings statement. That marks a deceleration in the speed of growth from the year-ago period and a figure that narrowly missed analyst estimates.
- Executives emphasized a spotlight on full-funnel promoting, including upper-funnel tactics that may construct brand awareness. A key a part of that strategy is Amazon Prime Video, which is entering its second yr of running ads, however it’s an area where Amazon still lacks maturity in comparison with its core retail media offerings.
- Still, the upper-funnel shift has helped Amazon attract more non-endemic advertisers, or advertisers that wouldn’t normally sell products through its e-commerce marketplace, such as automotive and financial services brands. Ad-supported streaming is an area where competition is quickly heating up.
Amazon’s ad segment is a juggernaut that has made the corporate into probably the most formidable platforms within the digital media arena. That said, its rate of growth continues to chill, suggesting that areas like lower-funnel retail media are maturing while upper-funnel bets are too fresh to have yet realized their full monetization potential. Sponsored product ads, which remain the biggest contributor to Amazon’s promoting, still have a runway for more growth, CEO Andy Jassy said on a call discussing the outcomes with investors.
“We even have a variety of newer streaming offerings which can be beginning to grow to be significant recent revenue sources,” Jassy said. “On the streaming video side, we wrapped up our first yr of Prime Video ads, and we’re quite pleased with the early progress and headed into this yr with momentum.”
In Q4 2023, Amazon’s ad revenue was up 27%, in comparison with 18% over the identical period in 2024. Despite the slowdown, the corporate is attracting an “increasingly large base” of advertisers, CFO Brian Olsavsky said on the analyst call.
Prime Video is the core piece of Amazon’s upper-funnel pitch, bolstered by prime-time programming like NFL “Thursday Night Football.” A robust content slate has welcomed non-endemic advertisers into the fold. Amazon’s full-year promoting haul reached $56.2 billion in 2024, the primary yr wherein ads ran on Prime Video. That’s nearly double the figure from three years prior.
“It is probably going that Prime Video accounts for a significant slice of the roughly $19 billion that Amazon Ads saw in 2024 year-over-year net revenue growth,” said Gartner Vice President Analyst Eric Schmitt in emailed comments.
“Much of Amazon’s growth can also be coming from non-endemic sellers, such as financial services and telecom corporations keen to tap into Amazon’s audience reach, premium streaming TV inventory and built-in data assets and commerce connections,” Schmitt added.
Some type of deceleration is to be expected as any business matures. Crucially for Amazon, promoting continues to be providing a lift to profitably, which could help as the e-commerce giant navigates future headwinds. Amazon reported robust Q4 earnings overall but its Q1 2025 forecast was weak, anticipating an “unusually large, unfavorable impact” from foreign exchange rates.
While Amazon was a front-runner in bringing premium live sports to streaming, it’s facing stiffer competition in 2025. Netflix, which can also be making ad-supported streaming a much bigger a part of its growth agenda, has seen traction because of moves like airing two Christmas Day NFL games and the blockbuster Jake Paul vs. Mike Tyson boxing match last yr.
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