Frager Factor

Tuesday, June 04, 2013

As Amazon's Ad Revenue Crosses $609 Million, We Peel Back The Hood To See How The Big Five Monetize Traffic and Data

I have always argued that the lifetime customer value passing through the veins of PPC was the biggest missed opportunity among the top domain portfolio holders. Today we can put some numbers to what I mean— eyeopening numbers of what the data is worth about purchasing habits and demographic profiling.

Amazon has spent the past six years parlaying its users’ product browsing and purchase data into an advertising business that many consider having the potential to rival Google, Facebook and Yahoo for brands’ digital dollars. Amazon has kept the shades drawn on how ads contribute to the e-commerce company’s bottom line, but research firm eMarketer has a compiled a peek.

Amazon’s global advertising revenue rose by 45.5% last year to top $609.9 million, according to estimates released on Tuesday. EMarketer said ads tied to search results make up the majority of its ad revenue with display ads running on Amazon-owned sites like and contributing a substantial remainder.

To get an idea of how Amazon’s ad business compares with some of today’s biggest players, here are the full-year 2012 ad revenues for Google, Facebook, Yahoo, AOL and Twitter:
Google: $43.7 billion
Facebook: $4.28 billion
Yahoo: $4.03 billion
AOL: $1.42 billion
Twitter: $288.2 million (per eMarketer estimates)

My 2008 arguments that the data profiling would have more value than the click proving true in 2013
But perhaps even more important than the number of people Amazon reaches is the information it’s able to collect from those consumers. Amazon has the kind of data direct-response advertisers love -- which specific products people are searching for, looking at and buying -- and lots of it, and is able to connect that data to specific registered user accounts.

Buoyed by its scale and data, this year the company will reap $835.05 million, and by 2015, U.S. ad revenue alone -- a $450 million dollar business last year -- will stream $1.1 billion, per eMarketer. Those marks would pit Amazon closer on par with Facebook and Yahoo, yet the company would remain a far cry from Google’s juggernaut.

More via source: AdAge

About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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