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Amazon Q3 ad revenues surpass $1 billion, up roughly 2x from early 2016

Amazon's CFO said that advertising revenue is growing 'very quickly.'

Greg Sterling on October 27, 2017 at 6:19 pm

Yesterday, Amazon announced third-quarter earnings. The company reported sales growth of 34 percent to $43.7 billion. A year ago, Amazon reported $32.7 billion in sales.

For the purposes of this post, the noteworthy part is Amazon’s “other” revenue, which is basically advertising. Buried at the bottom of the Net Sales chart in the press release was this line item:

“Other” is defined by Amazon to include “sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements.” It’s a safe bet, then, that ad sales for the quarter were $1+ billion, which represented 58 percent year-over-year growth. Since Q2 of 2016 ad sales have basically doubled.

On the earnings call, Amazon CFO Brian Olsavsky said, “Advertising revenue continues to grow very quickly and its year-over-year growth rate is actually faster than the other revenue line item that you see there [in the ‘other’ category].”

The fact that Amazon is now on par with or surpasses Google in product search is not lost on retailers and brand advertisers. Reflective of the company’s intensifying effort to attract ad revenues from search marketers and agencies, Amazon made its first appearance at SMX East in New York City this week to promote Amazon Marketing Services advertising offerings.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.