Amazon’s advertising business is growing faster than the majority of its competitive set due to demand for sponsored product listings and broadening its inventory through Prime Video, live sports, Twitch and its wider display network.
Advertising revenue climbed 26 per cent year on year to $19.8 billion in the July quarter, outpacing Amazon’s overall revenue growth of 20 per cent. It is on track to generate annualised revenues of almost $80 billion, cementing its position behind only Alphabet and Meta among the world’s largest advertising platforms.
Amazon CEO Andy Jassy said that although sponsored products continue to be the backbone of its advertising revenue, there have been solid gains elsewhere.
“Increasingly more shoppers are discovering products in our agentic and conversational experiences, including in Alexa+ and Alexa for Shopping. Shoppers who click a Sponsored Prompt convert to a sale 48 per cent more often and spent 21 per cent more on average than those who don’t,” he said.
He said there is also growth and engagement in Prime Video Ads and Live Sports.
Amazon introduced more than 30 new advertisers to the NBA in its first year of an 11-year streaming deal with the US basketball competition.
Inventory on Thursday Night Football, NBA, WNBA and NASCAR all sold out.
Per Jassy, “Advertisers are increasingly investing in multi-sport strategies, with brands activating across multiple sports seeing 2.3 times higher unduplicated reach compared to single-sport advertisers. And multi-sport viewers are driving 12 per cent higher spend and 17 per cent more orders on Amazon.”
A third contributor is the use of AI-powered tools such as an ads agent to help advertisers optimise campaigns across the Amazon ecosystem.
The advertising performance formed part of a standout quarter for the Seattle-based company. Total revenue rose to a record $200.6 billion, while Amazon Web Services accelerated to 37 per cent growth — its fastest expansion in more than four years — as demand for AI infrastructure continued to surge.
Last week, Meta revealed it had also posted strong Q2 growth of 27 per cent dues to increases in ad cost and volume.
