September 05, 2018

Amazon sets its sights on the $88 billion online ad market


Amazon is quickly gathering momentum in a new, highly profitable arena: online advertising, where it is rapidly emerging as a major competitor to Google and Facebook.

The push by the giant online retailer means consumers - even Prime customers, who pay $119 a year for access to free shipping as well as streaming music, video and discounts - are likely to be confronted by ads in places where they didn’t exist before.

In the company’s most recent financial results, there was a category labeled “other” that caught the attention of many analysts. It mostly consists of revenue from selling banner, display and keyword search-driven ads known as “sponsored products.” That category surged by about 130 percent to $2.2 billion in the first quarter, compared with the same period in 2017.

Those numbers are a pittance for Google and Facebook, which make up more than half of the $88 billion digital ad market. But they come with big and troubling implications for those two giants.

Get the full story at The New York Times

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