Amazon launches advertising business the size of YouTube

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Amazon’s logo is seen at the company’s logistics center in Bretigny-sur-Orge, near Paris, France, December 7, 2021. REUTERS/Gonzalo Fuentes/File Photo

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NEW YORK, Feb 3 (Reuters) – Amazon lifted the lid on its sprawling advertising business for the first time on Thursday, revealing more business than Google’s YouTube.

Amazon reported ad revenue of $9.7 billion for the fourth quarter, up 32% from a year ago, and $31 billion for the year. Read more

YouTube recorded $28.8 billion in ad revenue for 2021.

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Twitter analyst Benedict Evans said this made Amazon’s ad revenue similar in size to the entire global newspaper industry, and Statista estimated annual global newspaper ad spend at $29.5 billion. of dollars.

Amazon, known for e-commerce, has a lucrative cloud business, AWS, and the advertising business is considered extremely profitable, although Amazon hasn’t broken down those profit numbers.

Amazon runs ads on its website and wakes up the screens of some of its tablets, using its customers’ search queries to help target ads. These ads often come from companies that sell in its marketplace.

“Selling digital advertising space is a nice source of income to have in uncertain times,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

On Wednesday, Meta Platforms Inc (FB.O) shook confidence in the online advertising industry, saying privacy changes by Apple Inc (AAPL.O) had made it harder for advertisers.

An Amazon official, however, told reporters that brands’ ability to reach consumers through its ad properties was “largely unchanged” after Apple’s changes.

Lund-Yates saw Amazon’s advertising business more in line with Google parent Alphabet (GOOGL.O), which also has its own customer data from its search system, and shrugged off Apple’s changes.

Amazon ad revenue growth slowed 88% in the second quarter. But the totals also make it bigger in terms of sales than Pinterest (PINS.N) and Snap (SNAP.N), which also posted strong results on Thursday.

Pinterest posted revenue of $846.7 million for the fourth quarter and Snap brought in $1.3 billion. Read more

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Reporting by Danielle Kaye; edited by Peter Henderson and Chris Reese

Our standards: The Thomson Reuters Trust Principles.

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