The world’s largest online seller generated nearly $610 million in ad revenues last year according to a new report from eMarketer. The e-commerce giant is making a play for more digital ad business with substantial efforts to build out its in-house ad tech capabilities and expand its offerings on mobile through the Kindle and apps.
Last year’s revenue jumped 45.5 percent from 2011, and the company’s ad revenue growth is expected to increase nearly 37 percent this year to $835 million after traffic acquisition costs (TAC). eMarketer assumes that, unlike competitors like Google, Amazon does not pay large TAC to partner sites.
Amazon launched Product Ads six years ago and has since added Sponsored Products ads for sellers on Amazon and display ads, served on Amazon-owned sites (including IMDb, Zappos, Diapers.com), and now, Kindles and mobile apps.
The company has sought to scale its advertising initiatives through its unique retargeting capabilities to run ads on non-Amazon Web properties, reportedly powered by its own demand-side platform (DSP). Amazon’s retargeting technology allows the company to mine data from its 152 million customer accounts and segment consumers based on their Amazon shopping history.
More recently, Amazon has begun going after branding budgets, bringing in business from automotive companies like Lexus, which has run campaigns on the Kindle Fire. According to AdAge, Amazon’s fastest-growing ad categories are travel and automotive.
Nearly 74 percent, or $450 million, of last year’s ad revenue came from the U.S. eMarketer expects Amazon’s U.S. ad revenue to top $1.1 billion by 2015.