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Amazon’s online advertising business is experiencing growth as the digital ad market shows signs of improvement.
According to the company’s latest financial results, Amazon’s ad business generated $10.68 billion in sales during the second quarter, marking a 22% increase compared to the same period last year. Amazon’s overall sales also grew by 11% year-over-year to reach $134.4 billion in Q2.
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Analysts had projected that Amazon’s advertising business would generate $10.4 billion in sales for the second quarter.
According to Insider Intelligence, Amazon’s online advertising business currently holds approximately 7.3% of the worldwide digital ad market. However, Alphabet and Meta remain the leading digital advertising companies with market shares of 28.8% and 20.5% respectively.
Amazon’s advertising business has been thriving while Meta’s core digital ad business has been declining. The implementation of Apple’s 2021 iOS privacy update has limited the effectiveness of Meta’s online ad platform, leading some companies to shift their budgets from Facebook and Instagram ads to Amazon’s platform in search of better sales opportunities.
However, there are signs of a potential recovery in Meta’s online advertising business as the digital ad market starts to show signs of improvement.
Meta reported a year-over-year revenue growth of 11% in the second quarter, reaching $32 billion. This marks the second consecutive quarter of sales growth after three quarters of decline. Investors are now more optimistic about Meta’s core business, thanks to the company’s efforts to enhance its online advertising platform following Apple’s iOS update.
Alphabet’s second-quarter sales grew by 7% year over year to $74.6 billion, resulting in a 7% rise in the company’s stock. Google’s advertising revenue increased by 3.3% year over year to $58.14 billion during Q2, while the sales in its YouTube advertising unit grew by 4.5% to $7.7 billion.
Pinterest reported a 6% year-over-year increase in second-quarter sales, reaching $708 million, although its costs and expenses rose by 11% to $781 million.
On the other hand, Snap’s second-quarter revenue dropped by 4% year over year to $1.11 billion, marking the company’s second consecutive period of declining revenue.
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