Jeff Bezos, CEO, Amazon
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Amazon will be a major shareholder in the top digital advertising industries in 2021 and 2022, according to a new advertising buyer buyer survey from Cowen published Tuesday.
Amazon’s advertising industry will continue to grow as more consumption comes from TV, review and other digital platforms and as buyers see a strong return on investment on the platform. Amazon’s advertising business is also emerging, at least in the eyes of consumers, to be so open to the ongoing privacy debate and Apple’s upcoming privacy changes for ad tracking on the iPhone.
Cowen’s study was based on responses from 52 major U.S. ad buyers in December representing $ 15 billion in U.S. advertising spending. He asked for their opinions on Amazon, Google, Facebook, Snap, Twitter, Pinterest and TikTok.
Respondents on a weighted weight basis said they expect Amazon’s share of their digital advertising cost to rise from 7% in 2020 to 11% in 2022. And while they expect YouTube and TikTok to get about 1% of the region over that period, their responses indicated that other platforms may remain flat or see region erosion.
Cowen analysts wrote that they estimate that Amazon’s advertising revenue will rise to $ 26.1 billion in 2021, and rise to $ 85.2 billion by 2026. They wrote that they believe share will grow Amazon ad of global advertising industry, excluding China, from 8% in 2020 to 13% in 2026. Amazon’s “other” segment in its earnings report, which mainly makes its advertising business, revenue- $ 14.1 billion in 2019.
When asked buyers which advertising platform outside of Google or Facebook’s premises may or may not be a significant part of their digital advertising cost, 35% said Amazon has average straight base, which rises to 43% by weight of consumption.
“Meanwhile, the second most popular option was for GOOG / FB to continue to make up the bulk of future advertising buyers’ digital budget, 27% on wholeness [average] foundation, “analysts wrote.
Buyers also ranked Amazon second in the return category on outbound investment from all platforms, second only to Google search. They noted that customers on Amazon have a high buying intention and that people on Amazon want to buy, not just scroll.
Respondents also said they believe Amazon is most insulated from the impact of Apple’s upcoming ad privacy changes. In the coming months, Apple will begin implementing a new rule that will require you to opt-in to ad tracking when you open an app that uses it. Companies like Facebook fear this will damage their ability to collect data about users and target advertising effectively.
“Amid the backdrop of the upcoming IDFA change on iOS and a discussion about privacy and tracking, survey respondents said that Amazon was more likely to influence the upcoming change (ahead of YouTube and Google Search), ”Cowen analysts wrote. “AMZN appears to be in a good position compared to its peers, aided by high conversion from within the Amazon store, reducing reliance on other sites / apps for implementation.”
In a note earlier this month, MKM Partners analysts said based on a set of parameters, Facebook and Snap’s highest possible header due to Apple’s privacy changes, has continued with Twitter and Pinterest. They said Google and Amazon have the lowest relative exposure.
In a December note, Bank of America analysts also said that Facebook and Snap are most at risk from the changes, possibly generating a 3% revenue headline for Facebook and a 5% header for Snap. They wrote that Twitter has little experience with mobile app downloads, but said the publication is relatively small compared to Facebook and Snap. Pinterest and Google are the least open to IDFA, they said.
CNBC’s Michael Bloom add a statement.