Jeff Bezos is getting richer… and spending on Amazon ads is growing, quickly. During the first half of 2018 Amazon’s advertising revenue grew by 36% year-over-year, reports Standard Media Index (SMI), which sources data directly from agency invoicing systems. That compares to 16% year-over-year growth during the first half of 2017 and an 11% increase during the year-earlier period.
SMI isn’t the only to report rapid increases in Amazon ad spend. Merkle recently reported that among its clients the median advertiser spent more than 2-and-a-half times as much on Amazon Sponsored Product Ads (+165%) and Headline Search Ads (+162%) in Q2 2018 as a year earlier, with spending growth accelerating in Q2 compared to previous quarters.
As a result, large advertisers are beginning to devote significant portions of their advertising budgets to the e-commerce behemoth (which now is estimated by eMarketer to account for almost half of all e-commerce spending in the US).
Marin Software’s Q2 2018 Digital Advertising Benchmark Report, for example, indicates that customers who are active on Amazon are now dedicating more than one-fifth of their overall digital ad spend to the platform.
Sponsored Product Ads (SPAs) continue to be the dominant ad format on Amazon, per Marin’s report, accounting for 79% of spend during the quarter. However, Headline Search Ads (HSAs) sported far higher click-through rates (2.68%) than SPAs (0.49%). Merkle has found similar results in terms of click-through-rate disparities between those two formats, though in its Q2 study it reported that HSAs resulted in 10% fewer sales per click than Sponsored Product Ads.
All told, advertisers are clearly gravitating towards Amazon advertising, which Marin Software notes “has essentially become a massive search engine for consumers far down the purchase funnel.”
No wonder, then, that a recent survey from Marin Advertising revealed that the rise of Amazon is one of the biggest trends of the year for digital advertisers…