Insights

Amazon’s Ad Business Expected to Hit $20B by 2020

20-Billion

According to Alex DeGroote, a media analyst for Cenkos Securities, Amazon’s advertising business could grow to roughly $20B by 2020. While Facebook and Google currently dominate the online advertising market, Amazon may be able to join their ranks in the coming years. “I think Amazon will do retail search and take Google to the cleaners on retail search using their estate,” DeGroote said in a CNBC phone interview. “Slowly over time you will use Amazon as your retail search engine rather than Google.”

We view Amazon as not only a marketplace, but a discovery and education platform. Amazon continues to lead as consumers’ first destination for product search — over search engines and other retailers — totaling 55% of product searches in 2016. Nearly 60% of consumers are using their smartphones to check for pricing and other information when shopping at a brick-and-mortar retailer. By having great Amazon content and prioritizing Amazon’s digital marketing offerings, brands can not only increase their Amazon sales, but sales across the board.