After taking over almost everything else, Amazon is now one of the three biggest online advertising companies in the world.
That’s according to an estimate by Sir Martin Sorrell, CEO of the WPP, which is said to be the world’s largest advertising agency.
Although he didn’t give a time frame within with Amazon’s generated that amount of revenue, he was generally speaking about ad spend in 2016.
As quoted in Business Insider, Sorrell said: “It’s a question of who controls data. It’s all very well going on Amazon’s platform – as clients have found with Google and Facebook, control of the data is critically important.”
Google and Facebook dominate the online advertising market, generating revenues of almost $80 billion and $27 billion respectively in 2016, according to figure in The Guardian.
Together, the two tech giants accounted for 20 per cent of total online ad spend last year, with rest of the pie left to hundreds, maybe thousands, of smaller companies.
One of those smaller companies is Amazon Advertising Platform, but if it continues on its current growth curve in the sector, it won’t be “smaller” for much longer.
In a previous estimate by eMarketer, Amazon was said to have earned about $1 billion from online advertising in 2016.
In his comments, Sorrell said the tech companies’ critical advantage was their data collection about customers, something which may be to the detriment of marketers.
“It’s a question of who controls data,” said Sorrell. “It’s all very well going on Amazon’s platform – as clients have found with Google and Facebook, control of the data is critically important.”
Amazon does not report its online advertising earnings separately in company reports, categorising them in “Other”.
That was the category in which the online shopping giant’s logistics business unit’s earnings are generally kept.
However, the company has for the first time recently revealed how much its logistics business made – almost $6.5 billion in the first quarter of this year, according to a report in the Financial Times.
That makes Amazon one of the world’s largest logistics businesses – probably in the top five if not higher.
Meanwhile, Amazon’s online retail business is said to have earned way more than $94 billion last year, dwarfing Walmart’s $14 billion for the year.
However, Walmart, which is still one of the world’s largest retailers, principally because it has so many brick-and-mortar stores across the US, is actually making some significant moves in the digital space.
Recently it signed a deal with Google to enable voice shopping. It may be a novelty at the moment, and some would say the technology is still not good enough for the purpose.
But Walmart is also accelerating the development of its own online advertising platform, which has been called “an underappreciated growth opportunity”.
Its website, Walmart.com, is said to be displaying more ads from companies other than Walmart recently, and the company is increasingly using the masses of data it collects from the 140 million customers who shop at its 5,000 stores every week.