Amazon’s $31 Billion ‘Ad Business’ Isn’t

They getcha coming and going

Looking at Amazon’s quarterly financials, it would be easy to mistake the company’s $31b ad division as a serious shift in the online advertising industry, but that would be a huge mistake. You see, Amazon’s not really selling ads.

Nearly all of that $31b is for an “ad” on Amazon itself: that is it’s Amazon collecting billions from the sellers who rely on the company as their main retail channel, who are locked in a bidding war to buy the top spots in search and product pages.

This is a huge shift for Amazon in every way. In 2015, the company was booking $1b in annual ad revenue. The explosive growth of ad revenue was accompanied by an increasing presence of third-party Amazon Marketplace sellers: 3% in 2000, 60% today.

But just as significant is the shift in how Amazon presents its merchandise. As Marketplace Pulse succinctly put it, “Everything on Amazon is an Ad.”

https://www.marketplacepulse.com/articles/everything-on-amazon-is-an-ad

In a search result, the first 3–7 thumbnails are “sponsored results.” On a product page the top bar, the bottom third, and large swathes of the right bar and main body are for sale.