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Amazon has big plans for its multibillion-dollar ad business

Amazon has big plans for its multibillion-dollar ad business
[Photo: Flickr user Silus Grok]

After reporting a huge earnings beat, Amazon took to its quarterly call to gloat. While the company’s huge profit dominated discussion, analysts wanted to know more about its smaller, growing revenue programs.

When asked about the company’s advertising program, CFO Brian Olsavsky said, “It’s now a billion-dollar business for us.” While Amazon doesn’t break out advertising individually, this service is grouped in with its “other” net sales, which brought it $2.19 billion this past quarter, compared to $2.03 billion the previous one.

According to Olsavsky, Amazon plans to continue ramping up its ad offerings. This quarter it saw acceleration on “a number of fronts,” he said. More sellers, authors, and other businesses took to the platform to advertise. The company, he said, has hundreds of thousands of advertisers.

The e-commerce giant, said Olsavsky, plans to “continue to invest in new products for advertisers.” Currently advertisers use its services to increase product and brand visibility–especially in product searches. Amazon plans to build more ad offerings off of that. Olsavsky added that the company plans to offer better ad measurements, as well as build new ad automation features.

It’s true that Amazon’s advertising program is a drop in the bucket compared to Google and Facebook. Last year, those two companies earned about $114 billion in total online ad revenue. But as Amazon continues to ramp up its products, it could prove to be a real competitor down the line.

“We’re uniquely positioned,” said Olsavsky during the call, “to show [advertisers] direct benefit.”

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