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Typically when Amazon reports earnings, the spotlight is on the usual suspects: revenue, profit, and the company's cloud-computing business, Amazon Web Services.
But when Amazon releases third-quarter results today, all eyes will be on something else: Amazon's advertising services.
Long rumored to be a challenger to the ad supremacy of Google and Facebook, Amazon is finally making good on the threat. With Amazon.com, they are more likely to buy and buy from the world, and they are attracting dollars from Google and Facebook and moving them to the giant e-commerce.
Amazon brought in $ 4.2 billion in revenue to its "other" segment, which is primarily advertising, in the first half of 2018. That was up 135% from the first half of 2017.
FactSet expects the segment to post $ 2.39 trillion in the third quarter, up 113% from the same period a year earlier. In an earnings preview published Oct. 17, Cowen and Company Analyst John Blackledge identified advertising as one of Amazon's "core lifters," along with e-commerce and Amazon Web Services.
Earlier this month, CNBC reported that some advertisers were moving their budget to Google, "Google." Google parent company Alphabet also reports earnings today, and analysts will be watching to see if Amazon has left a mark on its top line. Nearly 50% of product searches begin on Amazon, according to a December 2017 survey by brand research firm Survata.
In September, research firm eMarketer elevated Amazon to third place in their ranking of US digital ad platforms, behind only Google and Facebook. The firm also doubled its expectations for Amazon's 2018 US ad revenue to $ 4.61 billion, which would give it a 4.2% share of the US digital ad market. "Increased search traffic gives third-party sellers a reason to increase bids for keywords on Amazon," Monica Peart, eMarketer's senior director of forecasting, said at the time.
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