For a few quarters, Amazon had three-digit growth rates. Growth then slowed to stand at 97% in the fourth quarter of 2018 and on Thursday the company announced that a 36% growth in its advertising business sector for the first quarter of 2019.
Amazon reports advertising activities in the "Other" category. And while advertising represents the majority of this category, Amazon said the advertising sector had grown "slightly above" 36% in the first quarter. Another thing to note is an accounting change that gives the previous quarters a more favorable light, so that the actual separation is not as great as it looks. That being said, Amazon is clearly investing in the development of its advertising and is still in its infancy. This is what Amazon had to say about it on Thursday.
Zoom on the relevance of ads. "I would really say that what we are focusing on right now is to enhance the relevance and ensure the most useful advertising possible. I think it will be the best experience for customers, but also for advertisers. "Brian Olsavsky, chief financial officer of Amazon, said during the call for results that the deceleration of the last two quarters was mentioned.
Construction tools for easy shopping. "So we put the emphasis on adding features, adding products and adding reports to companies and advertisers, so that they can understand the extra customers they see on Amazon through advertising with Amazon, "Olsavsky said. . "So today it's more geared towards tools and better recommendations, making it easier to use our Amazon platform, including operational improvements."
Support brands. "And then, I suppose, we are also very focused on the brand service. This is another theme we have, "said Olsavsky. "These branded stores we have are easy to create, personalize, and the brands understand us very well, but they can show buyers who they are and tell their story. This creates a better commitment for the brand and the customer. This increases customer loyalty to this brand and Amazon. "
Another nascent enterprise. "I would simply say that we are at the beginning of this adventure. There are many – it has a lot of pickup by both sellers, sellers and also the writers. Once again, we have the impression that if we work on the inputs of this company and continue to develop the traffic on the site, we will have a good result in the advertising space. "
Why we should care. Is this deceleration only a reflection of growth pains? It is likely that we will continue to witness fluctuations in growth as Amazon continues to invest in the platform and its products. Amazon made several changes reflecting the objective of improving "the effectiveness and performance of advertising," Olsavsky stressed. In September, it streamlined its advertising products to simplify the purchase of advertising from the perspective of Google and Facebook advertising platforms. New display formats and video, plus inventory for sponsored advertisements of sponsored products and brands.
Among its customers, Merkle indicated that Amazon advertisers saw their sales attributed to the two sponsored brands more than double those of the previous year, with expenses increasing respectively 19% and 77%. More than half of the spend on sponsored products came from investments other than the first research results, Merkle said.
Speaking of investments, Amazon also announced that it was investing 800 million dollars to default to one. One-day shipping for Premium members, instead of the current two-day shipping offer.
About the Author
Ginny Marvin, editor-in-chief of Third Door Media, manages the daily editorial operations of the company. all of our publications. Ginny writes on paid online marketing topics, including paid search, paid social networks, targeted posting and retargeting for Search Engine Land, Marketing Land and MarTech Today. With over 15 years of marketing experience, she has held senior management positions in both in-house and agency management. It can be found on Twitter under the name of @ginnymarvin.