Amazon ad services revenue up 26% to $12 billion in Q3

Amazon generated $12.06 billion from its advertising services in the third quarter of 2023.

The figure marks a 26.3% increase from the same period in 2022 – a result significantly better than forecasts predicted by Wall Street.

Why we care. Amazon’s exceptional performance is the latest sign digital advertising is experiencing a robust resurgence following the economic downturn. Earlier this week, Meta and Snap also reported big digital advertising revenue. This should instill confidence among cautious marketers, ultimately rekindling their trust in the sector. As trust is rebuilt, experts anticipate a surge in ad spend during the all-important holiday season in Q4.

Exceeding expectations. Financial analysts had predicted that ad revenue would generate $11.6 billion in Q3 – which would have marked a 21% year-on-year increase. However, Amazon’s ad sales surpassed this by $460 million. The segment includes:

• Sales of advertising services to sellers
• Vendors
• Publishers
• Authors
• Third parties through programs like sponsored ads, display ads and video advertising.

Ad partners. In the third quarter of this year, Amazon teamed up with a number of publishers and brands to serve ads on their apps and websites for products that are sold via Amazon in the US, including:

• BuzzFeed
• Hearst Newspapers
• Pinterest, Raptive
• Ziff Davis’ Lifehacker
• Mashable

The retail giant suggested these collaborations played an important role in its success in Q3.

Leveraging AI. Amazon also attributed its successful third quarter to rolling out new AI capabilities for brands and advertisers. In India, Amazon introduced a generative AI digital assistant to assist small businesses in setting up an online store, offering support with registration, listing, and advertising.

Other AI announcements included Amazon’s Supply Chain, a fully automated service for sellers to efficiently transport products from manufacturers to customers.