Amazon’s advertising business came down to earth, with growth of only 36 percent, a decrease from past periods, but still helping the company post robust profits.
On Thursday, Amazon announced first-quarter results with $2.7 billion in the advertising section of the report, up from $2 billion in the first quarter of 2018. Amazon’s advertising business falls under the “other” category on its balance sheet, which the company says is mostly comprised of revenue from ad sales. The advertising part of the business grew nearly 100 percent in the fourth quarter on revenue of $3.4 billion. The fourth quarter is typically the strongest for sales and advertising because of the holidays.
Amazon’s main business blew away expectations and the stock was up in after-hours trading. Amazon posted a profit of $3.5 billion for the quarter, beating Wall Street analysts expectations. Total sales revenue from the e-commerce business reached $59.7 billion.
Amazon credits advertising and its cloud division, Amazon Web Services, with powering most of the profits.
Advertising is still a bright spot for Amazon, and a core focus for the company as it builds the marketing technology infrastructure so brands can sell their goods on its platform.
Last year, Amazon showed it was committed to building an advertising platform to compete with Facebook and Google. It overhauled the ad business to make it easier for brands and ad agencies to manage marketing campaigns that include search ads on Amazon.com, display ads on websites across the internet, and video ads on properties like IMDB Freedive, a new ad-supported streaming service from Amazon.
Via:: Ad Age B to B