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

7 hours ago

Behind Spotify's new Southeast Asia campaign

EXCLUSIVE: Campaign talks to Jan-Paul Jeffrey, Spotify’s head of marketing, on the streamer's latest regional campaign for Indonesia, Thailand and Philippines.

8 hours ago

Tech MVP 2022: Sunil Naryani, Dentsu

MOST VALUABLE PROFESSIONAL: Chief product officer Sunil Naryani has been instrumental in elevating the product offerings from Dentsu and driving radical collaborations across market product leaders.

9 hours ago

Why purposeful creativity is more important than ...

Why do we still rush to come up with a once-in-a-lifetime brilliant stroke of genius that had zero impact on anyone’s life or business, and then proudly stand on a stage receiving accolades for our achievements? MediaMonks' APAC ECD ponders this question and more.

12 hours ago

Here's Google's plan to to help advertisers manage ...

David Temkin, senior director of product management, ads privacy and user trust at Google, who is leading the charge on preserving ad targeting and measurement while tracking restrictions loom, discusses these shifts.