Amazon ad sales jump 19% even as shopping meets resistance

Amazon’s main e-commerce business may be slowing down, but advertising continued to grow at a pace that beats digital ad rivals such as Google and Meta. Amazon Ads grew 19% year over year to nearly $11.6 billion in the fourth quarter, Amazon announced Thursday. Amazon’s overall fourth-quarter sales, including e-commerce and cloud computing, increased 9% year over year to $149.2 billion. Amazon projected lackluster revenue in the current quarter, worrying investors that the company’s main e-commerce business has stalled, and sales growth has slowed in the cloud computing division. Its shares fell in extended trading. Notably, Amazon’s advertising growth was lower than it had been in the third quarter last year, when it rose 30% year over year, which could signal some weakness, Andrew Lipsman, principal analyst at Insider Intelligence, said in an email. “Amazon Ads had a great quarter relative to the rest of the digital ad industry, and will continue to outperform in the coming quarters,” Lipsman said. “In the context of Amazon's business, it decelerated following a resurgent Q3 and wasn't as strong as it could've been given it had the benefit of an October Prime Day event in Q4 that it didn't have last year. And given how much Amazon's retail business depends on the ads business for profits, it simply didn't help out as much as it could have.” Tracking layoffs and budget cuts How brands and agencies are bracing for a recession Click here Amazon’s ad spurt came as the company launched new ad-supported content on Prime Video, including NFL Thursday Night games. The NFL deal gave Amazon exclusive access to 15 games a season as well as advertising rights to those games. Amazon also has been building out its ad technology. It recently released AWS Clean Rooms, which provides “data access controls to protect sensitive data, while allowing customers to create secure data clean rooms to generate unique insights about advertising campaigns,” Amazon said in its earnings release on Thursday. Amazon’s larger rivals in digital advertising have been struggling. Google search and YouTube ads both decreased year over year in the fourth quarter, the search giant reported Thursday. YouTube’s ad revenue was down 8% and search revenue decreased 2%. Google’s overall ad business, bringing in nearly $60 billion in the fourth quarter, generates far more revenue than Amazon Ads. Meta’s fourth-quarter ad revenue dropped 4%, to $31.25 billion, the company reported on Wednesday. Amazon’s shares dipped about 4.7% in after-hours trading because of fears about the overall economy and its potential impact on e-commerce. Amazon has embarked on cost-cutting measures, like so many companies. Amazon has slowed the opening of new buildings, abandoned some facilities and started axing experimental teams. It started a new round of job cuts last month that will eventually total 18,000 employees. —With Bloomberg News

Amazon ad sales jump 19% even as shopping meets resistance

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