Omar Oakes
Apr 29, 2019

Amazon ad revenue slows to (only) 34% growth

Slowdown in retail giant's 'other' services is greater than expected.

Amazon ad revenue slows to (only) 34% growth

Amazon’s ad revenue growth slowed sharply in the first three months of this year.

In its first-quarter earnings report, the online retail giant posted 34% year-on-year growth in "other" business activities to $2.72 billion. 

This number consists almost entirely of advertising sales. Last year, Amazon enjoyed a year-on-year doubling of ad revenue, which surpassed $10 billion for the first time in 2018.

The slowdown in ad revenue growth means that it is no longer the fastest-growing area of the business, despite it still being a relatively small part of Amazon’s overall revenue.

EMarketer's senior forecasting director, Monica Peart, said the slowdown in other revenues was more pronounced than expected.

"[The slowdown] showcases the moderating sales for third-party sellers as the platform seeks to maximise profitability, at some cost to these sellers," Peart explained.

Meanwhile, its lucrative cloud computing division, Amazon Web Services, grew 42% to $7.7 billion for the quarter, although that is slower than its 49% growth rate last year. Subscription services (Amazon Prime) also grew at 42% to $4.34 billion. 

Amazon's financial reports now fully include Whole Foods Market, the grocery business it bought in 2017. "Physical stores" had virtually flat growth for the quarter, with revenue up 1% $4.31 billion.

Online stores, the bulk of Amazon’s business, grew 12% to $29.5 billion.

Amazon posted a 17% rise in revenue (reported as net sales) to $59.7 billion for the three months ending 31 March. 

Its annual total revenue for 2018 came in at $232.9 billion, which is a higher figure than the gross domestic product of all but 47 of the world’s nations, according to International Monetary Fund figures.

Source:
Campaign UK

Related Articles

Just Published

18 hours ago

Lalamove launches fast delivery campaign across ...

Lalamove wants to connect more with SMEs as they make up 90% of all business in these cities.

19 hours ago

How brands and agencies are celebrating Singapore ...

Agencies and retailers are marking the city-state's 55th birthday with a mix of fun, sales and community giveback.

20 hours ago

iQiyi to focus on driving product sales through ...

The Chinese video streamer is ramping up its offline activities like pop-up stores based on their original content.

22 hours ago

A rebranding of… the dental clinic

New work by VMLY&R Australia is an ambitious attempt to make trips to the dentist ‘fun’ and ‘hip’.