Amazon makes headway in breaking up Facebook and Google's digital ad duopoly

Marco Green
September 19, 2018

First-place Google and second-place Facebook will control a combined 57.7 percent of USA digital ad revenues with 37.1 percent and 20.6 percent respectively, collectively down slightly more than a percent from past year, eMarketer forecast.

Amazon (AMZN) is expected to move ahead of Microsoft (MSFT) and Oath, the Verizon (VZ) subsidiary that owns AOL and Yahoo, into third place in the United States digital ad market, according to a report released Wednesday by the research firm eMarketer.

Amazon's market value based on its share price topped $1 trillion early this month, but has since dropped back below that dizzying mark.

As eMarketer notes, the change in projection - up 60 percent from March - is due to a combination of an accounting change and a 10 to 12 percent increase in stronger-than-expected ad revenue growth.

Amazon's increased search traffic from consumers looking for products on its site has also boosted its ad business, giving third-party sellers a reason to spend more on Amazon keywords, said Ms.

Another reason was that people are increasingly turning to Amazon instead of Google to start searching for items they are interested in buying.

Amazon comes in at third place, just ahead of rival Microsoft, which, including its LinkedIn professional social networking arm, will post digital ad revenue of $4.5 billion this year, eMarketer estimates.

A caveat: A big reason that Amazon's ad revenue is showing huge growth is because of an accounting change, effective January 1, 2018, under which the company's advertising services are now classified as revenue rather than cost of sales. EMarketer predicts Amazon will generate $4.6 billion in United States online ad revenue this year, up substantially from the $2.9 billion eMarketer had forecast in March.

Amazon is attractive to advertisers looking for insight into the impact of their ad buys on purchases.

Advertising is "now a multibillion-dollar business for us", Amazon CFO Brian Olsavsky said on the ecommerce giant's Q2 earnings call July 26.

Other reports by Click Lancashire

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