Amazon’s High-Flying Advertising Growth Levels Out

Amazon’s advertising business has had its second $3 billion quarter in the second quarter of 2019. The first was during the holiday fourth quarter last year.

A $3 billion quarter during an off-holiday is pretty good for sure, but it seems that their growth is coming back down to earth. Second-quarter ad revenue increased 37% from the year before, but the second straight quarter of fairly mild growth compared to the triple-digits Amazon recorded in most of 2018.

The biggest advertising market for Amazon has been North America, the only market where a number of the latest advertising tools are available. But, Amazon is eyeing international advertising growth with product expansions and measuring “around improving relevancy on each of those geographic websites,” said the Amazon director of investor relations, Dave Fildes, on the earnings call.

Amazon acquired Sizmek’s ad server and dynamic creative optimization in June. The acquisition will enable advertisers to use Amazon’s data from searches and purchases to target audiences beyond its own properties. Sizmek continues to operate independently, but executives said they’re looking long-term at the investment.

“We’re invested in the long-term success of Sizmek. And again, Amazon advertising and Sizmek has many mutual customers, so we know how valued these prudent solutions are to the customer base,” said Fildes. “So we’re looking forward to working with that team and we’ll share more updates as we invent and create new opportunities to serve advertisers in the future.”

Amazon’s main focus is video content. The company’s marketing expenses rose 48% yer over ear in the second quarter, which was partially due to “more and more advertising as we roll out devices and Prime Video — new Prime Video content, in particular internationally,” said Brian Olsavsky.

This should mean that more brand opportunities as Amazon makes more video supply available across its properties, including OTT video supply. This includes adding supply via Fire TV apps, IMDb TV, Amazon Publisher service integrations and simplifying inventory access for third-party apps, said Fildes.

SourceGinny Marvin

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