Julia Faria
Research lead covering advertising and marketing
Amazon advertising in the U.S. - statistics & facts
Amazon has been shaking the digital advertising landscape, giving Google and Meta a run for their (ad) money. While the latter still hold the highest shares of U.S. digital ad revenue, their duopoly is declining. Their market shares are expected to shrink, whereas forecasts show continuous growth for Amazon. In 2023, the online retailer’s global ad revenue reached 49 billion U.S. dollars, nearly tripling the 2019 result. With global sales of 575 billion dollars and millions of internet users visiting its platform, the retailer has become the leader in retail media advertising.
An effective advertising tool
With third-party cookie deprecation looming, marketers worry about losing the ability to target audiences effectively. During a survey of U.S. consumer packaged goods (CPG) marketers, nearly half of respondents rated Amazon’s targeting effectiveness as very good or excellent. Only grocery delivery platform Instacart scored higher. Additionally, roughly one in three thought Amazon’s data sharing capabilities were equally good. In this metric, Amazon made it to the top three. When it comes to return on investment (ROI), Amazon is a clear winner by a relatively large margin. These three factors and Amazon’s unprecedented reach can explain the platform’s success.
Amazon’s advertising business
Digital retail media ads are placed in online stores and marketplaces, reaching consumers at the point of purchase. Being one of the most visited e-commerce websites worldwide, it is no surprise that Amazon is a dominant force in the segment. It attracted over 75 percent of U.S. digital retail media spending in 2023. It has also become one of the powerhouses of the general U.S. digital ad industry, and it’s expected to increase its market share annually in the coming years.An effective advertising tool
With third-party cookie deprecation looming, marketers worry about losing the ability to target audiences effectively. During a survey of U.S. consumer packaged goods (CPG) marketers, nearly half of respondents rated Amazon’s targeting effectiveness as very good or excellent. Only grocery delivery platform Instacart scored higher. Additionally, roughly one in three thought Amazon’s data sharing capabilities were equally good. In this metric, Amazon made it to the top three. When it comes to return on investment (ROI), Amazon is a clear winner by a relatively large margin. These three factors and Amazon’s unprecedented reach can explain the platform’s success.
Competition is growing
It is a success that would tickle the fancy of any marketer, and other retailers have begun to copy the business idea. Target launched their ad platform already in 2016, Macy’s in 2020, and Instacart in 2022, to list just a few. However, the only player that has managed to conquer a market share significant enough to name is Walmart. With its platform, Walmart Connect, launched in 2021, the company held a seven percent share of U.S. retail media ad spending in 2023. And even though Walmart’s ad revenue is still just a fraction of Amazon’s, industry analysts see a lot of potential in Walmart’s retail media network (RMN). It offers something Amazon simply does not have: thousands of physical stores in the United States and numerous other countries. During a 2023 survey carried out among marketers, Walmart was named the most promising brick-and-mortar RMN in the U.S. The company’s management is aware of the potential and has announced investments in that area. So while Amazon is working on turning the current digital advertising duopoly into a triopoly, it must stay watchful and continue improving its ad products to stay competitive in the retail media market.
