Predicted annual ad revenue for Amazon projected to hit $69 billion
Amazon's advertising arm generated record revenues in 2024, accounting for approximately 5% of the global ad spend, according to GroupM's $1 trillion estimate. The e-commerce giant reported impressive financial results in its Q4 2024 report on February 6. Net sales increased by 11% for the year, reaching $638 billion, with net income nearly doubling to $59.2 billion.
During an earnings call on February 5, Amazon President and CEO, Andy Jassy, expressed satisfaction with the robust growth of the advertising business, which brought in $17.3 billion in Q4, up 18% year-on-year. Jassy highlighted that this revenue rate represents a substantial leap from four years ago, when it stood at $29 billion.
Jassy attributed the growth primarily to Sponsored Products, which are seeing potential for even more expansion. He also highlighted newer streaming offerings, such as Prime Video, as significant new revenue sources. The company wrapped up its first year of Prime Video ads, and Jassy expressed satisfaction with the initial progress.
Jassy further discussed Amazon's efforts to streamline full-funnel advertising for brands and shared the capabilities of its new multi-touch attribution model. This model allows advertisers to understand the contribution of each ad type in their campaigns to overall sales.
Amazon's advertising segment has experienced remarkable growth, with Q1 2025 revenues reaching $13.9 billion, marking a 19% year-over-year increase compared to Q1 2024. Despite this strong growth, advertising still accounts for a relatively small share (about 9.2%) of Amazon’s total income, but its expansion rate is one of the highest within the company's business portfolio.
The company continues to invest in and expand its advertising ecosystem, utilizing its extensive first-party data, high user reach, and diverse ad formats to attract advertisers and fuel growth.
- The growth of Amazon's advertising business, which brought in $17.3 billion in Q4 2024, has been primarily attributed to Sponsored Products, with potential for even more expansion.
- Amazon's advertising segment has experienced significant growth, with Q1 2025 revenues reaching $13.9 billion, representing a 19% year-over-year increase compared to Q1 2024.
- Amazon continues to investment in and expand its advertising ecosystem, utilizing its extensive first-party data, high user reach, and diverse ad formats to attract advertisers and fuel growth in finance, news, business, technology, and other industries.
