Please ensure Javascript is enabled for purposes of website accessibility

A Foolish Take: Marketers Are Boosting Their Spending on Amazon's Ads

By Leo Sun - Updated Apr 11, 2019 at 11:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-commerce titan is catching up to Google and Facebook in online ads.

Last September, eMarketer estimated that Amazon (AMZN 1.42%) would command 4.1% of the U.S. advertising market in 2018. That put it in third place behind Alphabet's (GOOG -0.28%) (GOOGL -0.27%) Google and Facebook (META 2.03%), which together controlled 57.7% of the market.

That was a surprising development, but it didn't indicate Amazon would disrupt Google and Facebook's duopoly. However, a new Nanigans survey suggests the gap is narrowing quickly, with marketers allocating 14% of their digital ad spending to Amazon, versus 21% for Google and 19% for Facebook/Instagram.

Chart showing percentage of ad dollars spent per platform.

Data source: Nanigans. Chart by author.

Half of those respondents plan to allocate more ad dollars to Amazon within the next 12 months, with an average spending boost of 25%. Some marketers will shift ad dollars from Google and Facebook to Amazon, but 41% will incrementally increase their ad budgets to support new Amazon ads.

Check out the latest Amazon earnings call transcript.

That's great news for Amazon, which could turn its ad business into a third pillar of growth alongside its e-commerce and cloud businesses. But it's an alarming development for Google and Facebook, as they both lack Amazon's access to consumers' shopping habits. Ongoing privacy concerns about Google and Facebook's ads could also make Amazon a more attractive ad platform.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$108.92 (1.42%) $1.52
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,234.03 (-0.27%) $-6.12
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$163.94 (2.03%) $3.26
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,245.13 (-0.28%) $-6.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.