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Amazon‘s ad unit keeps surging.
That business grew to $11.8 billion, representing 8% of its total revenue. Amazon reported net sales of $143.3 billion during the first quarter of 2024, up 13% compared to the same three-month period last year.
Year over year, Amazon’s ad segment increased 24%, outpacing Google but falling behind Meta for the first time in several quarters.
“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results,” Andy Jassy, Amazon president and CEO, said in a statement. “Our advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses.”
This year marks Amazon’s first appearance in TV upfront week, joining the flow of major streamers who are all making a big play to grab the growing pool of dollars once earmarked for linear TV. YouTube was added to the upfront roster in 2022, and Netflix joined in 2023, paving the way for Amazon’s entrance this year.
The Seattle-based company’s bet on Thursday Night Football appears to be paying off. Amazon Prime Video is set to stream its first National Football League Wild Card playoff game in January 2025. In the final quarter of last year, the company reported that annual viewership for TNF on Prime Video increased 24%. Last year’s match between the Seattle Seahawks and Dallas Cowboys Nov. 30 attracted 15.3 million viewers, making it Prime Video’s most-watched TNF game ever.
Despite its growth, Amazon’s ad revenue, which comes from sponsored posts and search, is still a distant third to Meta and Google. In the first quarter of 2024, Meta generated $35.6 billion from advertising. Google brought in $61.7 billion during the same period.
Amazon Ads also faces competition from a rising number of retail media networks, although it continues to dominate the market with an estimated 74.2% of U.S. retail media ad spend, according to eMarketer. Global retail media spend is projected to reach $140 billion this year and is one of the fastest-growing ad segments at 21.8% year-over-year.
Amazon’s dominance in retail media has forced others to make bold moves to compete. Walmart, for example, which saw $3.4 billion in annual revenue, plans to acquire smart TV-manufacturer Vizio for $2.3 billion, giving its growing ad business a shot in the arm.
