What Did Amazon Do This Week? - 12-02-2023

AMAZON THE LATEST THREAT TO FACEBOOK

While recession bells may be ringing less loudly, Amazon is aggressively chomping at Facebook’s ad revenue which reported its third straight drop in revenue while Amazon grew 19% in the fourth quarter (see chart). Just one reason why some researchery folks are starting to call Amazon names like ‘Para-state’.

Amazon has a lot of mechanics at its disposal; expect more woe if you are a Meta exec for subsequent quarters. Amazon knows this is a core area where it can dominate and rake in customers (and cash). Roll back the clock twelve months, and Amazon didn’t even publicly talk about its ad business. Today, Amazon’s ad division boasts $38 billion annual business, with year-over-year revenue of $11.6 billion. Put another way, the ad business of Amazon is worth an entire Burberry, AEGON or Twilio. Those figures are with just 7.3% share of the market. Amazon is third in the digital global digital ad market, a distant third too, with Google at 28.8% and Facebook a not-so-close second with 20.5%.

SO WHAT?

Beware of going all in with Amazon ads. Making Amazon richer and smarter is ultimately the way this happens. Beyond this, work on making Amazon’s customer, your customer. A hard job, but entirely possible with a good campaign-based approach and focus.

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