Amazon Ad Revenue Set to Soar in 2020
A widely circulated report shows that the ad revenue for Alphabet Inc.’s (NASDAQ: GOOGL) Google will drop for the first time since the data has been measured, even if it still will have more ad revenue than any other digital property in America. As ad revenue continues to decline due to the spread of COVID-19, there will be one winner. Amazon.com Inc. (NASDAQ: AMZN), which got into digital ad sales later than most large digital companies, should post a sharp increase in its dollars.
Research firm eMarketer expects Google’s ad revenue to drop to $39.6 billion from $41.9 billion in 2019. Second place Facebook Inc. (NASDAQ: FB) is expected to post a very small increase of 5% to $31.4 billion. Amazon’s jump is expected to be by 23% to $12.8 billion. Unlike the other two, Amazon only ramped up its ad sales business sharply in 2017.
Amazon’s advantage over its two largest competitors is that it sells sponsorship of products when people search the category. A search for personal computers brings up an ad for Lenovo PCs. It promotes the brand before people see the products for sale below the ad.
With hundreds of millions of products for sale at Amazon.com, the e-commerce company allows sellers to get an advantage if they are willing to pay.