Source: WARC
Amazon is currently a relatively minor player in digital advertising, but that is likely to change rapidly over the next couple of years, as a new survey of top US media buyers has found they expect to double their adspend with the online retail giant by 2020.
As reported by Recode, investment bank Cowen questioned 50 senior US ad buyers in late December and they predicted that Amazon’s share of their digital ad budgets was on course to double from 6% in 2018 to 12% by 2020.
These ad buyers, who together control around $14bn of digital adspend in the US, also indicated that Facebook could lose 3% of market share over the same period, although spending on Facebook-owned Instagram was expected to rise by 2%.
Google and YouTube were also expected to sustain modest losses in market share, although Facebook stood out as most vulnerable because of ongoing privacy concerns about its handling of user data.
According to the Cowen report, the senior advertisers in its survey ranked Amazon third for return on investment, after Google Search and Bing, and they were increasingly drawn to Amazon because of its conversion rates and unique ability to directly connect ads to purchases on the same page.
Cowen analyst John Blackledge estimated that Amazon’s ad revenue will reach $13.7bn this year, up 56% from last year, before rising to $43.2bn by 2024, reported Investor’s Business Daily.
Meanwhile, in a separate development reinforcing Amazon’s aim to earn more from digital advertising, the e-commerce giant announced last week that its IMDb movie and TV subsidiary has launched a free video streaming service.
Supported entirely by ads, IMDb Freedive went live in the US last Thursday, allowing users to stream full-length movies and TV shows for free on the IMDb website and all Amazon Fire TV devices.
The service is currently available only via laptop or personal computer, but IMDb said it would listen to feedback from customers and soon make it more widely available, including on IMDb’s mobile apps.
