Amazon's Advertising Revenue Rises 26% Annually to Reach $19.8 Billion

Amazon's advertising division recorded 26% year-over-year revenue growth to reach $19.8 billion, in a performance that exceeds analysts' expectations and reinforces the company's position as the third-largest advertising force globally.

This growth outperforms the growth rates of its major competitors, as both Google and Meta struggle to maintain stable growth amid escalating competition and tightening privacy regulations, making it likely that Amazon will continue to gain advertising market share.

Amazon relies for its advertising revenue growth on diverse products including sponsored ads within product pages, its external display ad network, and Prime Video ad offerings that have opened new horizons for advertisers.

Analysts believe that the continuation of this growth rate could turn the advertising division into Amazon's largest source of net profit in the coming years, ahead of AWS and the e-commerce sector combined.

What do these terms mean?

Sponsored Ads: Ads that appear within Amazon search results or product pages, paid for by sellers per click, which are the most effective for directly targeting potential buyers.

External Display Network: A network that allows Amazon to display its ads on websites and apps outside its platform, leveraging purchase data to target consumers even outside the scope of the Amazon app.

Ads Based on Purchase Data: Ads that use consumers' actual purchasing behavior instead of stated interests, giving Amazon a clear competitive advantage over social platforms.