Amazon plans to challenge the online advertising duopoly of Facebook and Google by stepping into the market themselves in 2018.
CNBC reports that Amazon has been experimenting with advertising across their portfolio of products and even outside of their website according to interviews with multiple ad buyers and Amazon technology partners. Sources state that so far most of Amazon’s focus has been on new ad opportunities and the company’s e-commerce search and video products. A source told CNBC that Amazon is working with Kargo and other third-party mobile advertising companies to link ads on TV and mobile device screens.
Amazon has also reportedly begun bulking up their advertising staff, specifically in New York. Brian Olsavsky, Amazon’s Chief Financial Officer, previously stated on the company’s Q2 earnings call in July that they would be focusing on hiring more ad sales staff. Amazon did not respond to CNBC’s request for comment on this issue.
Amazon entering the online advertising world would be a huge shakeup to the two current largest online advertising businesses, Google and Facebook.
In 2017 the online advertising business was worth approximately $209 billion globally according to media research firm Magna Global, which also predicted that the industry will grow 13 percent to $237 billion in the next year. The Interactive Advertising Bureau reported that in the U.S. alone, $40.1 billion was spent in the first half of 2017 on online advertising. Google and Facebook have dominated the online advertising market for some time, controlling approximately 85% of all online ad growth in 2017.
As a result, many advertisers welcome further competition, and if anyone can challenge the likes of Google and Facebook, it’s Amazon. “Driving conversion and sales or creating very immersive high-impact branded content is what drives a lot of digital advertising revenue,” said Aaron Shapiro, CEO of advertising agency Huge. “Amazon is a player in both those areas.”