Editor’s Note: This story originally published on September 19, 2018.
Amazon already dominates a multitude of businesses. Online advertising may be next.
Amazon is expected to move ahead of Microsoft and Oath, the Verizon subsidiary that owns AOL and Yahoo, into third place in the US digital ad market, according to a report released Wednesday by the research firm eMarketer.
More people are starting their searches for products on Amazon instead of Google or another search engine, the report said. That means advertisers are willing to pay more to show up in keyword searches.
Amazon is projected to have a 4.2% share of the market this year, compared with 4.1% for Microsoft, which owns MSN, the Bing search engine and LinkedIn, and 3.3% for Oath.
To be sure, Amazon will still trail industry leaders Google and Facebook by a wide margin. Those two control a combined 57.7% of the market. Google is the leader with a 37.1% share, while Facebook has 20.6%. But their combined market share is expected to drop from 59.1% last year.
Amazon may be partly to blame for that decline. EMarketer predicts Amazon will generate $4.6 billion in US online ad revenue this year, up substantially from the $2.9 billion eMarketer had forecast in March.
And much of that growth is in mobile. Amazon is expected to have $1.6 billion in mobile ad sales this year, up from less than $500 million last year. EMarketer is predicting that Amazon’s mobile ad revenue will surge to $2.9 billion next year and $4.8 billion by 2020.
Monica Peart, eMarketer’s senior director of forecasting, attributed Amazon’s rapid climb up the digital ad rankings to its dominance in online retailing — and all the data that comes along with it.
“Its strong handle on consumer purchase behavior sets it apart from Google and Facebook in the digital ad market, which has made the company an attractive option for advertisers,” Peart wrote.
Amazon may also benefit from the backlash that Facebook and Google’s YouTube are facing because of privacy concerns, as well as worries that those two companies may face tighter regulation.
But Amazon, which recently joined Apple as the only US companies to top a trillion-dollar market value, doesn’t seem to be affected by these fears just yet. Online advertising is just another business where it has quickly become an industry leader, along with retail, cloud computing and media.
In fact, Amazon’s growing clout has led some analysts to predict that Amazon — whose stock has surged more than 65% this year — could beat Apple to a $2 trillion market cap.