Amazon’s results are out with the highlights being Fourth Quarter Sales up 20% to $72.4 Billion and massive growth for Amazon Advertising. Full Year 2018 net sales increased 31% to $232.9 billion, compared with $177.9 billion in 2017. Net income increased to $10.1 billion, compared with net income of $3.0 billion in 2017.
Amazon’s Q1 2019 guidance predicts Net sales expected to be between $56 billion and $60 billion, or to grow between 10% and 18% compared with first quarter 2018, which is a bit below where investors would like to see it.
Amazon Advertising
The area of huge interest is Amazon Advertising which include Amazon Sponsored Ads, Sponsored Brands, Display Ads and Amazon demand-side platform. Amazon’s reported figure primarily includes sales of advertising services, as well as sales related to their other service offerings.
Growth in Amazon ads slowed to 95% yr on yr, but that still represented an increase in spend of $830m compared to Q3 2018 and a increase of $1,653m compared to Q4 2017 – that’s an increase of $1.7bn for the peak quarter. Growth slowing to 95% is still massively impressive – spending on Amazon Advertising is still almost doubling year on year and as the business matures triple digit acceleration would be almost impossible to maintain.
Amazon Advertisings revenue for the full 2018 year came in at $10.1bn which is a staggering amount and demonstrates just how important merchants spending on ads is for the marketplace. It’s also a very strong signal that if you’re not investing in Amazon Sponsored Ads then you’re at a disadvantage compared to your competitor merchants who are.
One Response
No wonder the number is so high…. my companies alone spend more than £10k in Amazon ads per month! That’s more than £100k per year. That’s not even that much, I know sellers in the US who spend $1M+ per year in ads.
This is only the beginning of it all, I can see them doubling that amount over the next 5 years easily.