- Amazon’s revenue derived from promoting was up 24% year-over-year in Q1 to $11.82 billion, based on an earnings statement. The results beat Wall Street expectations.
- Sponsored product ads on the corporate’s sprawling e-commerce marketplace remained the first growth driver for the segment. The introduction of commercials to Prime Video in January also showed encouraging early results, executives said.
- A continued windfall from promoting could support Amazon’s other technology bets, including the rollout of a latest generative artificial intelligence (AI) assistant called Amazon Q that’s targeted at software developers.
Amazon’s promoting business remained on a tear during 1 / 4 that saw other digital platforms also profit from robust ad spending. Much of Amazon’s growth within the category still stems from traditional retail media in the shape of sponsored products listings that surface as users browse its e-commerce platform. But Q1 also saw the corporate’s streaming video strategy come into clearer focus with the introduction of ads to Prime Video, which has produced promising results up to now, CEO Andy Jassy said.
The change has proved controversial with some subscribers, even leading to a class-action lawsuit, but is very important to Amazon’s continued momentum in promoting because it invests in expensive premium programming and appears to supply marketers full-funnel capabilities that boost brand-building efforts. Amazon members will pay an additional fee to avoid seeing commercials and the corporate has promised to maintain the ad load light in comparison with streaming rivals and linear TV.
Amazon also operates the livestreaming service Twitch and a separate ad-supported streamer called Freevee. But Prime Video stands because the crown jewel of its video suite with offerings like NFL “Thursday Night Football” and hit shows like “Fallout,” a video game adaptation that has drawn 65 million global viewers since premiering last month. In January 2025, Amazon will broadcast its first NFL Wild Card playoff game because it continues to evolve its sports content slate.
“I believe advertisers are enthusiastic about with the ability to expand their ability to advertise with us in video beyond Twitch and Freevee to Prime video shows [and] movies. I believe in addition they find that the relevancy and the measurability of that type of promoting and Prime Video ads is exclusive for them,” said Jassy on a call discussing the outcomes with investors. “So, it’s off to a superb start.”
Amazon touting traction for ads on Prime Video comes as brands head into the thick of the upfronts season, an annual media-buying bonanza where they broker promoting deals for the months ahead. Amazon lately has presented as part of the NewFronts, the upfronts’ digital counterpart, but passed on a big showcase this 12 months. Instead, it’ll make its upfronts debut on May 14. The upfronts will bring stiff competition as Netflix, Google’s YouTube and a smattering of streamers are also making greater overtures for ad dollars.
Amazon’s overall Q1 performance was impressive, with total revenue increasing 13% YoY to $143.3 billion. Echoing other tech firms’ earnings talks of late, executives spent rather a lot of their time championing advances in generative AI, an emergent tech area that has excited investors but is expensive to develop. Ahead of the earnings report, Amazon announced the wide availability of Amazon Q, an AI assistant that uses an organization’s internal data to speed up software development projects.
Read the complete article here
