During a recent press release, Amazon explained how advertising had become a “key contributor” to its business as this present offer appears to be “extremely valuable” to both customers and brands.
Presenting its business result for the fourth quarter, Amazon showed how they were able to generate up to 60% profits on mostly its ad business but also includes co-branded credit card agreements to $1.7bn. In the previous quarter, the growth rate in ‘other’ revenue was 58%.
Amazon CFO Brian Olsavsky Speaking on a call with investors stated that the rise in its ad business is considered a critical line in for brands and agencies into the e-commerce marketing line. Amazon’s ad business is another form of digital advertising that stretches way beyond search and social
He further went on to explain that their strategy is to ensure that customers experience additive in the ad process. “We want our customers to experience new products and see new brands in a much easier process.”
Brian Olsavsky said he is of a strong opinion that value propositions mean that Amazon can be able to find new means by which emerging brands can quickly reach out to their customers. “We are working together with all types of advertisers to enable them to reach our customer base and at the same time enhancing discovery and better purchase decisions by the customer.”
So much has been considered about the role Amazon plays in their advertising space from now henceforth. Citi analysts estimate that Amazon’s ad revenues are likely to go beyond $10bn this year and rise to more than $50bn by 2028.
However, its current ad business is trying to compete with both Facebook and Google. Google’s parent company Alphabet saw ad revenues rise to $27.3bn in the fourth quarter, while Facebook’s ad revenue was estimated to be around $12.8bn.
Amazon also said it is “very excited” with how its public relations assistant Alex is performing, emphasizing on the fact that “it is a very positive surprise for us.”
Devices such as the Echo attained a record high, whereas Amazon did not disclose the actual figure, the skills for Alexa appears to be more than 30,000.
Brian Olsavsky also said “we noticed a very high level of customer engagement and also a growth in functionality”
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