In search results Amazon the top lines are occupied by products marked Sponsored. Major brands pay billions of dollars to the site, to get a prominent place. Until recently, Amazon was bringing two to three sponsored products to the top.. According to Marketplace Pulse, which researches e-commerce markets, now the number of sponsored products on the top lines of the issue has grown to six.
“Now there are fewer regular products on the page, so the only way to get listed is to buy your spot there.”, - said one of the leaders of the advertising agency Publicis.
According to marketing agency Merkle, the cost of promotion in search results is the main item of advertising expenses of retailers. In Q2 2021, sellers on Amazon spent 73% of the total advertising budget for search promotion.
As Amazon said, the number of ad spaces depends on the search query and other factors. For example, off platform: Appendix, desktop or mobile site. The user can see one, few or no advertisements.
In 2018, Amazon became the third largest, after Google и Facebook, advertising platform. The company regularly offers advertisers new services. For example, advertising in the format video.
Amazon is also taking advantage of its position and raising ad prices.. According to Canopy Management, who surveyed over 300 Amazon sellers, the cost of a click on a sponsored ad for the year increased from 86 cents to 1,27 $. Sellers pass the costs on to consumers.. According to Marketplace Pulse management, Amazon's miscellaneous fees are half the price of the item.
Amazon does not disclose the exact amount of advertising revenue in its financial reports.. The company says, that advertising makes up the bulk of this category of sales, как Other ("Other"). In the second quarter, this category grew by 87%, up to $7.9 billion.
Advertising revenue was only 7% of total sales for the quarter, that's not much. But advertising has a significant impact on operating profit, after all, this is a much more marginal business compared to the main activity. Same with AWS (Amazon Web Services). Cloud service brings companies 13% all proceeds, but 54% from operating profit.
