As a company, Amazon booked record revenues of $386 billion in 2020, while its stock price appreciated 74%. Those weren’t its only impressive numbers, however. Its U.S. ad revenue last year grew to $15.7 billion, up an eye-popping 52.5% from 2019.
Now here’s a little quiz about 2021: Who will be the leading share gainer in the digital advertising business this year, and who stands to benefit the most from Apple’s upcoming ad privacy changes? The answer to both is Amazon, according to industry experts.
The Wall Street Journal recently cited an eMarketer report that found Amazon’s share of the U.S. digital ad market grew to 10.3% in 2020 from 7.8% in 2019. That’s a 32% jump! Of course, Google and Facebook still accounted for 28.9% and 25.2% of the digital advertising business, respectively, in 2020. “But Amazon is quickly becoming a viable competitor,” said the WSJ. eMarketer predicts Amazon’s share will hit 11.9% in 2022 and 12.8% in 2023.
Conversion Power
SellerApp is a behavioral ecommerce analytics software that provides Amazon sellers insights derived from their data through tools and reports to help optimize their sales and generate more sales. Here’s what it had to say in a recent post: “Amazon Advertising had stupendous growth in 2020... In 2019, Amazon came up with some cool options for Sponsored ads (which) gave more flexibility to sellers in placing their ad campaigns. With (changes caused by) the pandemic, global brands are moving from the experimenting phase to strategizing their PPC. These exciting developments promise a bright future for Amazon sellers.”
Check out our guide on increasing your ecommerce conversion rates.
Why is Amazon Advertising powerful? SellerApp says the answer is simple: “Unlike Google and Facebook, Amazon shoppers have strong purchase intent, making the advertising features more profitable than the others. This is the major reason that sellers and brands are keen to explore this major marketplace. Secondly, conversions occur on Amazon right away. This makes it easy to track campaign performance.”
Brands Come Running
Here’s how EY, in a recent report, described the surge in online vs. in-store buying because of the pandemic: “One consequence of this sudden tilt toward ecommerce is that we’ve seen a decade of digital disruption in just a matter of months.” Manufacturers and retailers of all sizes had to hit the fast-forward button on their sales and distribution strategies, and it’s no surprise Amazon became the largest beneficiary of that shift in 2020.
“The growth of e-commerce during COVID-19 has substantially benefited e-marketplaces, especially Amazon.”
So, you may wonder, how many more brands jumped onto Amazon in 2020, and how did they do? Feedvisor recently announced a brand survey – its third annual – which analyzed more than 1,000 U.S. brands and their unique relationships with Amazon and e-marketplaces. Among other things, it looked at the advertising and media strategies of these brands, their plans for expansion, and the pandemic’s impact on their businesses. What did they find? Of the brands surveyed before COVID-19, a shocking 42% more of them are now selling on Amazon. Further, “61% of brands on Amazon saw overall revenue increase by up to 30% in 2020,” Feedvisor said.
“The growth of e-commerce during COVID-19 has substantially benefited e-marketplaces, especially Amazon,” said Dani Nadel, president and COO, Feedvisor, in the news release. “Brands can no longer afford to ignore Amazon’s significance, nor can they rely solely on their owned channels for the reach needed in today’s e-commerce landscape.”
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