TMN - amazon

Amazon beats Meta on online ad trend

Amazon’s online advertisement business outpaced social media giant Meta Platforms for the recent quarter.

Accordingly, the ad revenue of the e-commerce firm jumped 18.00% from a year earlier to $8.76 billion in the quarter. This latest result surpassed analysts’ expectations, underscoring the unit’s rapid ascent and increasing importance to brands.

Amazon has formed a robust online ad division by getting brands to pay significant fees to promote their products. Correspondingly, it grew faster than its larger market peers and beat the rest of the major players.

Conversely, Facebook warned that the segment experienced some turbulence due to the economic slowdown. It shrank for the first time and missed expectations, bearing the brunt of Apple’s iOS privacy change. At the same time, the company forecasts a second consecutive decline in revenue in the current period.

Like social media companies, Roku reported disappointing Q2 results. It also cited that the current ad market is reminiscent of the onset of the coronavirus pandemic. Previously, marketers prepared for macro uncertainties by quickly slashing ad spending across all platforms.

Conversely, Amazon provided reassurance to Wall Street by giving a positive outlook. It now anticipates revenue growth in the third quarter to post at 13.00% to 17.00%.

Amazon unaffected by Apple’s iOS privacy change

Moreover, Amazon has a distinct foothold against the other social media platforms that have struggled recently.

Last year, Apple’s iOS privacy adjustment made it difficult for ad-supported sites to track users. Eventually, this move had an outsized impact on Facebook and Snap. In contrast, Amazon has its own separate division, where advertisers go directly to build campaigns.

Then, analysts cited that companies concerned about a potential recession allocated more of their ad budgets to places like Amazon. As a result, the e-commerce market stands to offer more return on its investment.

For instance, Pinterest followed the said strategy. The image-sharing firm invested heavily in e-commerce as algorithms help people discover more items on Pinterest.

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