Some interesting notes from Amazon’s Q3 Earnings Call
Last week Amazon released their Q3 quarterly reports. Here are some interesting notes regarding their Sponsored Products and advertising business.
Amazon Q3 ad revenues surpass $1 billion!
Amazon’s advertising revenues (most of which are coming from Sponsored Products) are presented in the “other” section of the company’s report.
This is one of the most growing sections in the report!
in Q3 2016 the “other” revenues were 709 million dollars and now, in Q3 2017, it already reached 1,123 million dollars. That’s an increase of 58%.
In Q2 2016 it was only 626 million dollars.
Here is what their CFO Brian T. Olsavsky said during the question-and-answer session in the Financial Results Teleconference:
“Other revenue grew 58% in the quarter. And that includes advertising services and other things such as our co-branded credit card agreements.
Advertising revenue continues to grow very quickly and its year-over-year growth rate is actually faster than the other revenue line item that you see there.
But I would say, generally, we’re very pleased with the advertising business.”
Shoppers first. Advertisers second.
In his talk Olsavsky emphasized the importance of serving relevant ads to the shoppers and how Amazon relates to it’s ads:
“Our goal here is to be helpful to consumers and help them make better shopping and selection choices.
We’ll also provide – and giving them targeted recommendations, so making it helpful for customers rather than intrusive.
And then we believe that by creating that growth and engaging advertising experience with the customers, it will also maximize success for our advertisers.
So, it’s an important part of the flywheel and so it’s the traffic and the customers, especially the Prime customers that come to the site, are really the ones that we can use to help them select items and use advertising to help make their decisions more informed when they’re picking products.”
So, what can we learn from Amazon’s report?
1. The Sponsored Product ads is a big business and growing. More and more sellers and advertisers understand the importance of spending their marketing budget where they are worth most – in the store!
2. In-store promotions, when done wisely, is not intrusive or interfering shoppers – On the contrary – It can actually help them choose better.
Mabaya develops advertising tools that enable marketplaces and online retailers to monetize their traffic by offering sellers and brands to promote their products. Mabaya’s Sponsored Products Ads platform enables sellers and brands to bid in order to ensure their products are listed in premium locations in the online stores.