Amazon’s Advertising Business Surpasses YouTube

Amazon has lifted the veil on its advertising business, revealing results that show that its business is more significant than Google’s YouTube.

The company reported ad revenue of $9.7 billion for Q4, 32% higher than 2021, totaling $31 billion for the whole year. In comparison, YouTube’s ad revenue for 2021 came out to $28.8 billion.

The size of Amazon’s ad business makes it larger than the ad spending of the entire global newspaper industry, which comes out to $29.5 billion.

The Seattle, Washington-based company sells ads on its website and displays them on the wake screens of its tablet devices by targeting customers based on their search queries. These ads are typically paid for by companies that sell on its eCommerce marketplace.

“Selling digital add space is a cash generative nice-to-have in times of uncertainty,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

While Amazon’s ad business has ballooned in size, others such as Meta are seeing a decline, following Apple’s privacy changes. According to an Amazon official, the company’s ability to reach consumers through its ads has largely remained unchanged.

It is worth noting, however, that the company’s ad revenue growth has declined from 88% in Q2. That still makes Amazon’s ad revenue larger than that of Pinterest and Snap, which reported $846.7 billion and $1.3 billion in revenue in Q4, respectively.

Originally published at https://retailbum.com on February 4, 2022.

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