Amazon share of digital ad market on the rise: forecast

SAN FRANCISCO, United States — Online retail colossus Amazon is gaining ground in the US digital advertising market as the dominance of Google and Facebook erodes, according to an eMarketer forecast released on Wednesday.

The market tracker predicted that Amazon will take in $4.61 billion in online advertising revenue as its share of the US market grows to 4.15 percent, for the first time surpassing Microsoft and Oath, a subsidiary of Verizon Communications.

First-place Google and second-place Facebook will control a combined 57.7 percent of US digital ad revenues with 37.1 percent and 20.6 percent respectively, collectively down slightly more than a percent from last year, eMarketer forecast.

An accounting change by the company was given by eMarketer as one of the reasons for raising its prediction of how Amazon would do against rivals in the US digital ad market.

Another reason was that people are increasingly turning to Amazon instead of Google to start searching for items they are interested in buying.

“Its strong handle on consumer purchase behavior sets it apart from Google and Facebook in the digital ad market, which has made the company an attractive option for advertisers,” eMarketer senior director of forecasting Monica Peart said of Amazon.

“That increased search traffic gives third-party sellers a reason to increase bids for keywords on Amazon.”

Amazon’s market value based on its share price topped $1 trillion early this month, but has since dropped back below that dizzying mark. It was the second US company after Apple to hit the milestone.

Amazon has reportedly been beefing up its digital advertising business to better compete in an online ad market dominated by Google and Facebook.

In its second-quarter earnings report, Amazon said that revenue from an “others” category that included digital ad revenue jumped 132 percent to $2.2 billion from the same period a year earlier. /ee