Amazon’s advertising business might have a way to go before it reaches Martin Sorrell’s $100 billion prediction. Still, its recent growth has been staggering.
Amazon’s “other” revenue category, which “primarily includes sales of advertising services,” netted $2.5 billion in Q3, a 123% YoY increase. Read the release.
Despite this growth, Amazon was vague about its plans for its ad business during its earnings call Thursday with investors, though it did nix two rumors that Amazon would launch an ad-supported Prime Video offering and introduce advertising on Alexa.
“We have no plans to build an ad-supported Prime Video offering for free at this time,” said Dave Fildes, Amazon’s director of investor relations, during the call. He later added, “We don’t have any plans to add paid advertising to Alexa.”
Analysts on the call also wondered if Amazon would offer higher ad pricing and what steps Amazon was taking to put more ads on its properties.
But Fildes and Amazon CFO Brian Olsavsky simply said Amazon Advertising continued to see strong adoption and that Amazon was focused on building better tools for advertisers so that consumers would see better recommendations.
“If we do this right, we’ll both help advertisers and consumers at the same time,” Olsavsky said.
The ecom giant also posted $56.6 billion in Q3 net sales compared to $43.7 billion in Q3 last year – an increase of 29% YoY.
Amazon’s Q3 net income was $2.9 billion, compared to $256 million during the same period last year.
But Amazon’s revenues and Q4 guidance didn't meet Wall Street expectations and the stock took a 6% hit in after-hours trading.