eMarketer says that Amazon's share of the US digital ad market grew to 10.3% in 2020 from 7.8% in 2019 and estimates that revenue grew to $15.73B, up 52.5% YoY
Alexandra Bruell / Wall Street Journal :
Context & Ripple Effects
In September 2018, eMarketer already had Amazon in third place in US digital ads on an estimated $4.61B for the year — having just passed Microsoft. Two years later, the same shop puts Amazon at $15.73B and a 10.3% share, up from 7.8%. The bridge was 2020's lockdown e-commerce boom: eMarketer separately estimated US online sales grew 30%+ that year and Amazon's US retail business grew an estimated 39% YoY, which is precisely the shopper traffic advertisers were paying to reach.
The significance is structural, not just cyclical. IAB's subsequent tally showed the top 10 publishers and platforms capturing 78.6% of a record $189B 2021 market, so Amazon's share gains came out of the rest of a highly concentrated field even during the largest spend surge since 2006 — and when growth then cooled to 10.8% in 2022 per IAC and PwC, defending share became the whole game.
First-order effects
- Amazon's ad line is confirmed as a scaled second business: an estimated $15.73B in 2020 revenue at a 10.3% share, compounding far faster than the retail operation that feeds it.
- Brands selling on Amazon now bid against each other for placement inside the store where the transaction happens, making ad spend a direct cost of doing marketplace business on the platform.
Second-order effects
- Microsoft, which eMarketer showed Amazon overtaking for third place in 2018, falls further behind as Amazon converts retail traffic into ad dollars the incumbent platforms cannot replicate.
- Retailers and marketplaces watching Amazon price its shopper data face pressure to build competing ad products of their own, because unmonetized purchase intent is now a measurable loss.
Third-order effects
- With IAB showing ten platforms taking 78.6% of US digital spend in 2021 and IAC/PwC showing 2022 growth down to 10.8%, competition shifts from expanding the market to redistributing share — structurally favoring whoever owns the transaction.
- If the pattern holds, ad-market power keeps accruing to companies whose core business generates commercial data, further blurring the boundary between the retail and advertising industries.
The trend: US digital advertising is consolidating around platforms that own the point of sale, with retail transactions themselves becoming ad inventory.