Amazon has found another avenue through which to compete with other tech giants like Google: digital advertising.
According to news from CNBC on Tuesday (Dec. 26), Amazon will be expanding its digital advertising operations in the new year with a particular focus on search and video advertising products. The publication cited several unnamed ad buyers and technology partners in its report, who noted that Amazon wants to begin selling advertising on platforms other than its own. One source told the outlet that Amazon is collaborating with other mobile advertising firms like Kargo to develop collaborative television and mobile screen ad services.
“Driving conversion and sales or creating very immersive, high-impact, branded content is what drives a lot of digital advertising revenue,” Aaron Shapiro, CEO of advertising agency Huge, told CNBC. “Amazon is a player in both those areas.”
Other sources said that as part of Amazon’s expansion in the advertising market, it is hiring new staff, especially in New York. The company’s CFO, Brian Olsavsky, mentioned plans to hire more advertising staff during Amazon’s Q2 earnings call in July, reports said.
Earlier this year, CNBC said Amazon would be looking to compete with YouTube via expanded digital advertising and marketing solutions. Unnamed sources said the company is also considering opening up its data to advertisers for more personalized content.
Analysts at Magna Global said the digital advertising space hit a valuation of $209 billion in 2017 alone, predicting the industry will reach $237 billion in 2018 — a 13 percent increase. Analysts at eMarketer estimate Amazon is the fifth-largest advertiser in the U.S. in terms of revenue, though, according to reports, it accounts for just over 2 percent of the market.
Google and Facebook hold more than 70 percent combined, according to analysis from Pivotal.
Amazon’s expansion into digital advertising could help lower prices as advertisers seek other choices.