Amazon is quickly becoming an online advertising platform at par with Google and Facebook. This means that consumers, even Prime customers who pay $119 a year for access to special schemes, will also encounter ads on the platform. The company which mostly earns revenue from online sales and cloud computing services, has seen a 130% increase in its revenue from selling ads. Amazon earned $2.2 billion in the first quarter of 2018 in ad revenue from sponsored posts.
Although Google and Facebook earn about $44 billion in ad revenues, Amazon's growing numbers are still a problem for these two companies. This is due to the fact that Amazon has indispensable data about the shopping habit of customers, based on which it can serve ads which are people are likely to encounter when they are likely to be hunting for specific products. Their ads can not only target people with certain demographics but also a precise segment of customers who are likely to be shopping for a specific product. Amazon's public perception has improved in the advertising world while Google and Facebook's reputation has suffered.
Levis had recently shifted their ad budget from YouTube to Amazon which increased the brand's visibility in search results. Thus, more and more brands are advertising on Amazon in the recent years and planning to increase their budget for the same. Amazon has many big brands which advertise on its platforms like General Mills, Hershey, Verizon and Unilever. This is surprising because companies, like Verizon, AT&T and Geico, do not directly sell any product or service on Amazon but are still using it as for advertising. Amazon is scaling up to increase its advertising business by allowing brands to advertise on various platforms or devices. It is likely that Amazon will get a share of the pie of advertising market from Google and Facebook.