Amazon’s advertising business will gain the most share this year: Analyst Survey

Amazon CEO Jeff Bezos

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According to Cowen’s new ad buyer survey released on Tuesday, Amazon will be a major shareholder in the major digital advertising businesses in 2021 and 2022.

Amazon’s advertising business continues to grow as spending from television, search and other digital platforms increases and buyers get significant returns on their investment in the platform. Amazon’s advertising business also appears to be less exposed to ongoing privacy discussions and future Apple privacy changes, at least to buyers’ eyes, for ad tracking on the iPhone.

Cowen’s survey is based on responses from 52 senior US ad buyers in December, worth $ 15 billion in US advertising. We asked buyers what they thought about Amazon, Google, Facebook, Snap, Twitter, Pinterest, and TikTok.

Spending-weighted respondents expect Amazon’s share of digital advertising spend to rise from 7% in 2020 to 11% in 2022. We also expect YouTube and TikTok to gain about 1% of the share over that period, but have shown that other platforms may remain flat or see a decline in share.

Kawen analysts say Amazon’s advertising revenue is projected to reach $ 26.1 billion in 2021 and $ 85.2 billion in 2026. They said that Amazon’s advertising business share in global digital advertising, excluding China, will be 8% in 2020 to 13% in 2026. Amazon’s “Other” category of revenue reports mainly consisted of the advertising business, with revenue of $ 14.1 billion in 2019.

When asked which advertising platforms other than Google or Facebook properties could or are becoming a meaningful part of digital advertising spending, 35% averaged Amazon spending They said it would rise to 43% on a weighted basis.

“On the other hand, the second most popular option was that GOOG / FB will continue to dominate the digital budget of ad buyers for the foreseeable future, 27% of the total. [average] The rationale, “the analyst wrote.

Buyers also ranked Amazon second only to Google Search in the return on investment category for all platforms. They said Amazon is motivated by customers to buy and people are using Amazon to make purchases as well as scroll.

Respondents also said they believe Amazon is most isolated from the impact of Apple’s future changes in advertising privacy. Within the next few months, Apple will begin enforcing new rules that require you to opt in to ad tracking when you open an app that uses it. Companies like Facebook fear that this will compromise their ability to collect data about their users and effectively target their ads.

“Backed by discussions about IDFA changes and privacy and tracking on iOS, survey respondents said Amazon was least likely to be affected by future changes (prior to YouTube and Google search).” Cowen analysts write. “AMZN seems to be in a relatively good position compared to its peers, helped by high conversions from within the Amazon storefront, reducing its reliance on attribution to other sites and apps.”

In a note earlier this month, MKM Partners analysts said Facebook and Snap were most likely headwinds due to Apple’s privacy changes, followed by Twitter and Pinterest, based on a set of parameters. They said Google and Amazon have the lowest relative exposure.

In a December note, Bank of America analysts said Facebook and Snap were at greatest risk of change, with Facebook revenues likely to be 3% headwinds and Snap revenues likely to be 5% headwinds. .. They wrote that Twitter had some exposure to mobile app downloads, but said it had relatively little exposure compared to Facebook and Snap. Pinterest and Google are the least exposed to IDFA, they said.

CNBC Michael bloom Contribution report.

Amazon’s advertising business will gain the most share this year: Analyst Survey

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