Published: June 15, 2018 10:46 a.m. ET Amazon has leveraged Prime data to build multibillion-dollar online ad business that is growing quickly While much has been said about Amazon.com Inc.’s aggressive bets on brick-and-mortar retail, health care and many other industries, the company has quietly built a sizable and growing business in an area dominated by two other tech titans: digital advertising. Advertising pulled in up to $4 billion for Amazon
last year, and the company said first-quarter revenue from ads and other service offerings more than doubled this year.
Despite the dominant digital-ad positions of Alphabet Inc.’s
Google and Facebook Inc.
, that growth is expected to continue: BMO Capital Markets analyst Daniel Salmon now believes Amazon ad revenue will be $9.5 billion this year and nearly double to $18.58 billion in 2020. “I would say advertising continues to be a bright spot both from a product standpoint and also financially,” Chief Financial Officer Brian Olsavsky said on an April conference call; Amazon declined to comment for this article.
Those impressive numbers are in part propped up by the company’s vast trove of personal data that comes in the form of Prime memberships. Because the 100 million-plus Prime accounts are linked to specific people, the company can help advertisers find and track users from their existing databases as well as locate new potential customers.
“Prime has enabled [ads] for [Amazon],” said George Manas, president of Omnicom’s Resolution Media performance marketing division. Resolution manages $3.4 billion in ad spending.
“It’s turned that economy of services into a connected network around an individual and identity. It’s similar to what Google has been able to do around Gmail and other logged-in services.” Tying data to an identity is key for advertising because it allows marketers to target with immense accuracy across the internet. Read more from marketwatch.com…
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