"Unveiling Amazon's Competitive Edge: The Transformation from Retail Giant to Advertising Authority"

Our previous blog on the Global Ad Spends Report: Key Insights and Trends delved into the overwhelming dominance of the top three digital ad sellers. Magna's Global Advertising Forecast revealed a striking observation – the top three media owners, namely Google, Meta, and Amazon, collectively command 49% of global advertising revenues outside of China. More significantly, these three giants capture a staggering 80 to 90% of the global digital ad spend and contribute to 56% of the total global ad spend.

in a recent development, all three digital advertising behemoths released their annual financial reports consecutively. Let's narrow our focus to their revenue specifically from the advertising business.

In 2023, all three vendors reported a commendable 10% growth in total revenue, aligning with the digital advertising growth forecast outlined by both IPG and GroupM.

The driving forces behind the surge in global digital advertising revenues are Retail Media, Digital Video (including CTV), and search, as elaborated in our previous blog post

source: company reports

Breaking down the year-on-year changes among the three major ad sellers, Amazon's advertising revenue has outpaced its counterparts. As a leading player in retail media, Amazon leverages the vast retail searches occurring on its platform. Notably, Amazon boasts the largest repository of authentic and consented customer purchase data, providing advertisers access through Amazon DSP, a topic discussed in detail in our earlier blog post highlighting the benefits of retail media.

Adding to its strategic moves, Amazon recently opened up its Prime Video audiences for advertising in the U.S., U.K., Germany, and Canada in early 2024, with plans for further expansion. This move significantly broadens Amazon's advertising reach, allowing advertisers to connect with users through video advertising and targeted communication based on their purchase behaviour.

In the coming year, Google is set to gradually phase out cookies, accelerating the adoption of retail media. Retail players like Amazon, Walmart (Flipkart), and Kroger are actively enhancing their media offerings and forging partnerships with Customer Data Platforms (CDPs) and Demand-Side Platforms (DSPs).

In response to these evolving trends, Amazon launched the "Amazon Publisher Cloud" in October 2023. This tool, built on AWS Clean Rooms' secure data collaboration environment, enables publishers to analyse first-party data alongside Amazon Ads insights. It facilitates custom media buys for advertisers, enhancing campaign performance.

Expanding its ad tech solutions, Amazon announced 15 new advertising capabilities in its recent investor meeting. These include enhanced audience insights and advanced campaign planning, activation, and optimisation controls, empowering advertisers to efficiently reach relevant audiences and drive meaningful business outcomes.

Lastly, in addition to expanding inventory and data offerings, Amazon introduced a generative AI solution to help brands produce lifestyle imagery, enhancing the performance and engagement of their ads. This comprehensive approach solidifies Amazon's position as a frontrunner in the dynamic landscape of digital advertising.

Amazon has the environment cut out to make it a force to reckon with in the advertising world in 2024.