It is astonishing to know that Amazon’s highest revenue in the Q1 has not come from their ecommerce services, but form their advertising department. The company announced that their total income from advertisement has hit an all-time high of $2 billion, thereby giving a YoY increase of around 132%.
Amazon confirmed that advertising was their fastest growing department with a staggering 72% increase compared to last year. The company also adds that this department has left all other ones behind in terms of growth.
The company has maintained sturdy relations throughout which have contributed to their advertising revenue to cross the $2 billion mark for the first time. This was further a 17% increase in revenue as compared to 2017’s 4th quarter.
During the 1st quarter of 2017, the company’s total ad revenue stood at $580 million. Their total net income from all services in the 1st quarter of 2018 stood at $1.6 billion with an increase of around 125% as compared to that of the 1st quarter of 2017.
In the last quarter of 2017, advertising revenue jumped to $1.7 billion owing to the onset of the holiday seasons.
The holiday seasons played a major role in contributing to this figure and showed that businesses are considerably attracted to advertising in Amazon, although it is primarily an ecommerce site.
The company’s Prime service now having over 100 million subscribers also presents a viable means of advertising. However, as of now, Brian Olsavsky, CFO of Amazon says they have no intention of doing that.
Amazon’s total net sales reached $51 billion and saw a growth of 43% in the 1st quarter of 2018.
One of the major contributors in their sales figures was Alexa-enabled devices. In this respect, the holiday seasons witnessed an ocean of purchases of the company’s AI-based virtual assistant.
The company’s cloud computing platform Amazon Web Services (AWS) also had a fair share in this behemoth sales figure. AWS produced an operating income of $1.4 billion thereby growing about 49%.
Started back in 2006, Amazon Web Services had a continual advantage in digital marketing and saw comparatively less rivalry. According to Jeff Bezos, AWS has been backed by their efficient team that has resulted in it being the most evolved and most functionality rich service in the market.
Although Amazon’s revenue from advertising has reached $2 billion, it is still minuscule when compared to that of Google ($40 billion) and Facebook ($21 billion).
However, according to predictions by EMarketer, with their customer focus game, Amazon will be the 3rd largest marketer in the US after the companies mentioned above by 2020.