Amazon have announced that their third quarter sales were up 29% to $56.6 billion. This was slightly below investor expectations of $57.10 billion but Amazon Advertising performed well. Guidance for the fourth quarter is in the range of $66.5 billion to $72.5 billion, again below investor estimates which were anticipating a forecast of $73.79 billion.
The Amazon Advertising business profits shot up $301 million from $2.194 billion in the second quarter, to contribute earnings of $2.495 billion in the third quarter. At a growth rate of 123% year on year, it’s slowed slightly from the second quarter’s 129% growth but still a massively impressive achievement.
Amazon Advertising is still relatively new but now dominates search result pages on the marketplace. Amazon Sponsored Products conversion rate is higher than that of Google Shopping, which points to the high purchase intent of Amazon searchers relative to general search engine users according to Merkle.
As a merchant, retailer or brand selling on Amazon, if you’re not already using Amazon Advertising then it’s likely you are missing out on sales and will be forced to do so in the future or lose share of sales on the marketplace.
Looking at the conversion rates, if you’re investing in Google Shopping paid search then with the higher conversion rates of Amazon Advertising it is definitely time to divert some of your spend and start experimenting. Sellers who see your adverts on Amazon already have a buying intent and unlike Google, if your offer is appealing they can buy immediately with their stored Amazon credentials with no need to enter address or banking information.
