Forecast Boosts Digital Ad Ranking -- WSJ
September 20 2018 - 3:02AM
Dow Jones News
By Alexandra Bruell
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 20, 2018).
Amazon is expected to move up the rankings of the top U.S.
digital ad sellers in 2018 to take the No. 3 slot, thanks to an
acceleration in ad revenue growth and accounting changes by the
company, according to the latest forecast from research firm
eMarketer.
The tech giant is expected to generate $4.6 billion in U.S. ad
revenue, surpassing Verizon Communications Inc.'s Oath and
Microsoft Corp. in eMarketer's ranking, while still significantly
trailing the industry heavyweights, Alphabet Inc.'s Google and
Facebook Inc., according to eMarketer.
EMarketer estimated Amazon will have a market share of 4.15%, up
from its earlier estimate in March that the company's share would
be 2.7%. The research firm cited Amazon's "strong organic growth in
ad revenues" for the adjusted forecast, along with accounting
changes at Amazon.
The accounting changes, that have to do with reclassifying some
advertising services from cost-of-sales to revenue, were
responsible for the bulk of eMarketer's adjustment. On growth
alone, the forecaster would still increase its prediction for
Amazon's market share and move the company to the fourth slot,
behind Microsoft.
Amazon is attractive to advertisers looking for insight into the
impact of their ad buys on purchases. Amazon, unlike Google and
Facebook, has that purchase data, said Monica Peart, eMarketer's
senior director of forecasting.
Google and Facebook are still far ahead of Amazon and the rest
of the pack. This year, Google and Facebook will control 58% of
U.S. digital ad market, bringing in a combined $64 billion,
according to eMarketer.
Amazon's increased search traffic from consumers looking for
products on its site has also boosted its ad business, giving
third-party sellers a reason to spend more on Amazon keywords, said
Ms. Peart.
Amazon has also made it easier, through new technology systems,
for advertisers who aren't selling products on Amazon to buy ads.
"We're seeing a broader appeal to advertisers than we might have
expected," she said. "That's a major reason that we might have
underestimated what kind of growth would come through by the first
half of the year."
Revenue in Amazon's "other" category, which primarily consists
of advertising sales, more than doubled in the June quarter from a
year earlier to $2.19 billion.
Existing Amazon merchants and brands are among the customers
buying ads on the site, as well as authors and other advertisers
targeting Amazon customers.
EMarketer also projects that Amazon will increase its mobile ad
revenues 242% to $1.61 billion in 2018, giving it a 2.1% share of
the mobile ad market.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
September 20, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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