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Amazon ad sales increase by 22% as technological advancements improve brand performance.

Advanced machine-learning models are gaining popularity as brands grapple with the phase-out of third-party cookies.

Amazon ad sales increase by 22% as technological advancements improve brand performance.

During Q2, Amazon’s advertising sales continued to impress, showcasing its firm position in the competitive retail media landscape and benefiting from broader industry trends as spending rebounds. The company’s overall quarterly performance exceeded analysts’ expectations, with a notable 11% year-over-year increase in net sales, reaching $134.4 billion.

 

Amazon implemented significant cost-saving measures in recent months, including substantial staff reductions that affected its advertising division. Despite the challenges faced by other tech companies, Amazon’s advertising sales have maintained a consistent upward trajectory, bucking the downward trend in the digital market.

 

Meta, which began a recovery earlier in 2023, observed an 11% year-on-year increase in revenue during Q2. However, Amazon’s growth rate during the same period was twice as high, although its total revenue remains smaller. Envisioning a future where Amazon competes with more established digital giants is not far-fetched, especially considering the significant demand for its services driven by the loss of signals due to cookie deprecation.

 

Amazon has taken a more assertive stance in pursuing traditional television advertising revenue by leveraging its Prime Video offerings such as “Thursday Night Football.” Although the initial broadcast of the NFL program on the streaming platform featured basic advertising options, Amazon is now introducing advanced creative tools based on audience preferences and interactive video ads that enable viewers to make purchases directly from the content during the upcoming season.

 

Additionally, Amazon is promoting a Black Friday game tied to the popular cyber shopping weekend, aiming to replicate the success achieved with events like Prime Day. The latest Prime Day, which occurred in July, experienced a 65% year-over-year increase in marketing spending, as analyzed by Skai. Amazon reported that this was the most successful Prime Day ever in terms of sales.

 

While Amazon boasts notable media properties like “TNF,” its mainstay in advertising continues to be performance-based marketing. In this aspect, the company has adopted enhanced machine-learning (ML) tools that incorporate additional data signals, enabling brands to connect with customers they hadn’t reached before. These enhancements have led to improved click-through rates and return on ad spend, all while reducing the cost per impression, as detailed in the earnings statement. Competitors like Meta have also highlighted the efficacy of cutting-edge technologies like ML and artificial intelligence in generating more effective advertising campaigns.

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