Amazon is forecast to reach the number three spot among sellers of digital ads in the U.S. this year, according to market research firm eMarketer.
According to The Wall Street Journal, buoyed by a pickup in ad revenue growth and accounting changes, Amazon is on track to generate $4.6 billion in ad revenue in the U.S. alone. That would put the eCommerce giant ahead of Verizon Communication’s Oath and Microsoft, although it is still far behind Google and Facebook, noted the report.
eMarketer predicts that Amazon will end the year with 4.15 percent market share, which is higher than the firm’s past estimate of 2.7 percent. The research firm pointed to “strong organic growth in ad revenues” and the accounting changes. Based on growth alone, Amazon would be in fourth place, behind Microsoft.
Monica Peart, senior director of forecasting at eMarketer, told the publication that advertisers are increasingly turning to Amazon because it has a lot of insight on the impact ads have on purchasing decisions. She said that Amazon has also made it easier for advertisers that aren’t selling products on the platform to purchase ads.
“We’re seeing a broader appeal to advertisers than we might have expected,” she noted. “That’s a major reason that we might have underestimated what kind of growth would come through by the first half of the year.”
The New York Times reported earlier in September that Amazon is making a bigger push to go after the online ad market, which means customers — including Prime members — will see ads in places they haven’t seen them before on Amazon platforms. The report noted that late last month, gamers who use Amazon’s Twitch platform were upset when Twitch announced it would no longer be ad-free for Prime members unless gamers paid $8.99 a month for a service dubbed Twitch Turbo.
While Amazon makes most of its money in eCommerce, its other category — which consists of selling ads, such as banner and display ads — grew around 130 percent in the first three months of 2018 compared to the first quarter of last year. Google and Facebook, meanwhile, account for more than half of the $88 billion digital ad marketplace.