Amazon is making a leap forward in the advertising industry with $ 10 billion a year | Digital

Amazon achieved more than $ 10 billion in advertising revenue in 2018, as the e-commerce giant invested in its marketing products to encourage more brands to spend on its platform and promote their products.

On Thursday, Amazon released its fourth-quarter end-of-year results, which exceeded $ 72 billion in total e-commerce site sales, representing a 20% increase over the previous year. previous year and higher estimates than badysts. Profits reached $ 3 billion, up from $ 1.9 billion a year ago. And advertising continued to be one of the company's best badets, with $ 3.4 billion in its "other" category, mainly related to ad sales, which represents a 95% increase compared to the previous year.

Brands and advertising agencies work closely with Amazon, which creates an advertising platform that can compete with Google and Facebook. With $ 10 billion in 2018, this company is the third largest advertising market.

The $ 10 billion of the year erased what badysts had previously estimated. At the beginning of last year, eMarketer had predicted that Amazon would make only $ 2.8 billion in ad sales.

"There is a reason that these two largest advertising agencies are now paying close attention," says Will Magaritis, director of e-commerce for Dentsu-Aegis Network.

They still have some room for maneuver, however, Facebook announced this week more than $ 16 billion in advertising sales in the fourth quarter of last year, while Google is expected to exceed $ 135 billion in advertising revenue in 2018 when he will publish his results next week.

Last year, Amazon streamlined its advertising products to make them less confusing for brands and replicate them under the name Amazon Advertising.

Amazon sells search ads similar to Google's search system and display and video ads. Its reach extends to the entire Web, with its own ecommerce site, IMDb, Twitch and a network of external publishers that run its ads.

Amazon also owns Whole Foods, Fire TV and manufactures Echo devices, which manage its home badistant, Alexa. Brands find ways to play on all these properties.

The company is also competing with YouTube, Hulu, Roku and Facebook for video advertisers via FireTV. This month, Amazon also launched IMDb Freedive, an ad-supported video service that broadcasts Hollywood movies and TV shows with commercials.

"We are connecting to Amazon the same way we do it for everyone: Facebook, Google, Instagram, Pinterest, Snapchat," said Alex Collmer, CEO of VidMob.

VidMob uses another dynamic element of Amazon's business, Amazon Web Services, which is a cloud-based enterprise system. On Thursday, Amazon announced that Amazon Web Services had generated $ 7.4 billion in revenue, up 45% year-over-year. Advertising and AWS are Amazon's fastest growing segments. Both companies are increasingly used in tandem by marketing technology companies and advertising agencies.

One of the biggest criticisms of Amazon's advertising industry is that its products are even less sophisticated than the technology of their competitors. Amazon did not fully roll out the trial attribution program last year, which allows advertisers to know when their digital ads have led to sales on its site.

Amazon is expected to roll out the attribution tool more widely this year, and advertisers say the early results were already promising, which shows that Amazon ads are generating sales.

Amazon has become so important to the advertising industry because of its predominance in e-commerce. Brands are afraid of its power, but also know that they must maintain a presence on its site. The best way to be seen on Amazon is to buy ads.

"If you sell on Amazon, you're advertising on Amazon," says Wes MacLaggan, director of marketing at Marin Software. "And you increase your budgets."