Amazon’s ad sales continued to impress in Q2, a sign that the e-commerce giant is shoring up a dominant position in the increasingly crowded retail media category while riding some larger industry tailwinds as spending rebounds. The company’s quarterly performance overall landed above analyst expectations, with net sales increasing 11% YoY to $134.4 billion.
Amazon enacted some steep cost-cutting measures in recent months, including mass layoffs that impacted its advertising division. But unlike other tech firms, Amazon’s ad sales have remained on a steady upward trajectory despite an otherwise down digital market.
Meta, which began to recover earlier in 2023, saw revenue up 11% YoY in Q2. Amazon’s rate of growth over the same period was double that, though its overall take is far smaller. Still, it’s not hard to envision a future where Amazon is capable of going toe-to-toe with more enshrined digital heavyweights, especially because so much demand for its services is being driven by signal loss stemming from cookie deprecation.
Amazon has also been more aggressive at pitching for traditional TV ad dollars through Prime Video offerings like “Thursday Night Football.” While the primetime NFL program’s debut on the streamer only carried some rudimentary advertising options, Amazon is rolling out audience-based creative tools and interactive video ads that allow viewers to purchase what they see for the upcoming season.
Amazon is also promoting a Black Friday game that ties into the popular cyber shopping weekend in a bid at recreating the success of events like Prime Day. Prime Day, which took place in July, saw marketing spending up 65% YoY, according to a Skai analysis. It was the largest Prime Day to date in terms of sales, Amazon said.
While Amazon has some marquee media properties like “TNF,” its bread-and-butter when it comes to advertising remains performance-based marketing. On that front, the firm has adopted improved machine-learning (ML) tools that factor in additional signals that Amazon says are helping brands reach customers they previously couldn’t. The upgrades have resulted in better click-through rates and return on ad spend while lowering cost per impression, per the earnings statement. Rivals, including Meta, have also pointed to buzzy technology like ML and artificial intelligence as helping produce better-performing campaigns.