The Rise of Amazon Ads

Jeff Bezos’ Amazon juggernaut has a new target in its sights – advertising. The online advertising industry is growing and is expected to account for over 50% of global ad expenditure for the first time ever in 2021. Amazon look set to be the first company to break-up Google and Facebook’s long held duopoly in the online advertising industry.

They are looking to expand their offering beyond display ads on their mobile shopping app and online commerce store. These ad sales have been very profitable for Bezos (reportedly $10.1 billion in 2018) but there are new opportunities on the horizon.

Their streaming services like Amazon Prime Video, Fire TV and Twitch are all expanding. In addition, Amazon are developing new ad-enabled technology for Amazon Music, Alexa and the Amazon Kindle.

Twitch

Bought for $1 billion in 2014 after a bidding war with Google, Twitch is Amazon’s showpiece brand. The game streaming platform surpassed traditional powerhouse ESPN for viewing figures in the US for the first time in 2017. The platform now has more viewers than ESPN, Hulu and HBO combined. The number of esports viewers is expected to grow from 380 million to 589 million in 2020. At the present time, their only competitor in esports streaming market is Google’s YouTube Gaming.

Twitch Logo - Amazon Subsidiary

While Twitch has integrated advertisements with pop-ups mid-stream and sidebar advertisements, they are exploring the possibility of in-stream advertising and affiliate marketing. The former will be trialed in the Autumn of 2019 with eleven NFL games streaming live on Twitch. This is owing to the streaming partnership between Amazon and the NFL. Top streamers can promote their own merchandise on their Twitch channels now too. They can list up to 20 products on their personal Twitch store.

Early signs indicate that Amazon is about to become a major player in the online advertising market. The company’s digital ad revenue grew by almost 50% in 2018 and the share of the market increased to 8.8%. It may seem small but they are the first company to make any dent in the Facebook/Google advertising duopoly.

As we progress into the second half of 2019, it will be interesting to see how the online advertising market matures and what other competitors will join the battle.