Amazon confirms advertising will become a ‘meaningful’ part of its business

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Amazon’s advertising business has loomed quietly in the digital media space for some time but the online behemoth has given the clearest indication yet that it will now come to the fore.

Advertisers and agencies have been hearing Amazon-sized footsteps for some time but until now the business has erred away from revealing too much. However, on its latest earnings call Amazon was asked by one analyst as to whether advertising could become a more “meaningful part of the business” over the near to mid-term.

It’s much more a possibility than it ever has been, answered the business. “Our scale and number of customers, number of clicks, number of eyeballs and new content – video content and other opportunities for advertising has really helped create some in that business,” continued Amazon’s chief financial officer Brian Olsavsky.

That scale is tipped to swell its ad business by an average annual rate of 37% between 2016 and 2018, leaving it at $5bn, according to Wall Street investment form Morgan Stanley. While it’s a paltry sum compared to the $80bn worth of advertising Google gobbled up last year, its growth has already piqued the interest of Sir Martin Sorrell, the boss of the largest advertising holding group in the world.

“It’s pretty early in the days with advertising but we’re very pleased with the team we have and the results,” said Olsavsky in response to another analyst query. “Our goal is to be helpful to consumers and enhance their shopping or their viewing experience with targeted recommendations, and we think a lot of the information we have and preferences of customers and recommendations help us do that for customers.”
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