Amazon's Indian advertising sandbox

Early last year, Amazon revealed a secret it had long held close to its chest. For the first time in its history, it revealed just how much its ad business was worth. According to its filings, the e-commerce giant earned just over $31.2 billion in 2021. For context, YouTube earned a shade under $29 billion that year.

In 2022, despite the tough macroeconomic conditions afoot, Amazon’s ad revenue has continued to grow. For the nine months ended September 2022, Amazon clocked $26 million in ad revenue—leaving it on course to comfortably eclipse its performance from 2021. 

While advertising still accounts for a relatively small portion of Amazon’s overall earnings—its consolidated revenues crossed $300 billion in the same period—it  already accounts for 8-10% of digital advertising globally. Now, Amazon is looking to eat away at the lead that Meta and Google have built over the last two decades.

Under the stewardship of Andy Jassy, who succeeded Jeff Bezos as Amazon CEO in 2021, the Seattle-headquartered company has made attempts to go beyond the mainstay of its advertising business—search ads. There are, of course, obvious avenues for Amazon to leverage—its Prime video and music streaming platforms or video game streaming platform Twitch, for instance. It even sells digital ad inventory for its physical stores.

Already, sellers, advertisers, and others in the e-commerce ecosystem tell The Captable that Amazon has rapidly become a top priority for marketeers and digital-first brands in India. This interest, though, is still restricted to a few categories that naturally lend themselves to selling on Amazon, such as electronics accessories and fashion. 

India isn’t simply contributing to the coffers of Amazon’s advertising machine. It’s playing a part in the e-commerce giants desire to up its ad game. Indeed, Amazon is introducing features—such as Amazon miniTV or live shopping—in India which could help it build newer, richer ad inventory beyond simple search ads and sponsored listings.