Amazon has a Big Advertising Business

CNBC reported earlier this spring that Amazon’s ad tech business is now generating more than $2B every quarter. This is a huge business. Uber, as an example, is reported to have done $2.6B in revenue 1Q 2018. AND Amazon is reporting a 139% growth rate.

This is big for the industry. They could quickly become a top player, maybe even giving Facebook and Google a run for their money.

But this isn’t the most interesting thing, as Claude Denton at AdExchanger pointed out in his recent article, Your Ad Tech Tax Is Amazon’s Opportunity. Basically, Amazon is competing mostly in Header Bidding, and serving a huge amount of their own ads. The differentiation is that they have built their own platforms. They are getting direct access to the supply and aren’t paying the 15% exchange fee, or the 15% DSP fee. They have cut out the middleman. Or As Claude put it,

“Imagine being able to bid 30% higher than competitors but still keep your margins.”

Amazon is still very choosy with their partners. They only work with big top tier publishers. But if they open their floodgates, this is could be revolutionary for the industry.

Leave a Reply

Your email address will not be published. Required fields are marked *