Amazon (AMZN) Exceeds 10% of US Digital Ad Market Share, Gap to Google (GOOGL) Expected to Further Shrink by 2023 - WSJ

April 6, 2021 7:15 AM EDT
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The latest research report from eMarketer shows that Amazon (NASDAQ: AMZN) surpassed 10% of the US digital ad market share in 2020, the Wall Street Journal reported.

The ecommerce titan continued to close the gap to market leaders Google (NASDAQ: GOOGL) and Facebook (NASDAQ: FB) as more and more brands shift to AMZN to help them expand their customer base.

eMarketer data shows Amazon holds a 10.3% market share, up from 7.8% in 2019 after the US ad revenue soared 52.5% to $15.73 billion. Despite a step forward, AMZN still lags behind Google and Facebook, which accounted for 28.9% and 25.2% of the business, respectively.

However, Amazon’s share is expected to continue rising to 12.8% by 2023, eMarketer forecasts. On the other hand, Google’s digital ad business in the U.S. is expected to decrease from 28.9% in 2020 to 26.6% in 2023

“This is one of these situations where the pandemic accelerated something that was happening anyway. We are expecting pretty notable continued gains in share through at least 2023, specifically looking at the search side,” Nicole Perrin, a principal analyst at eMarketer, said.

“Not only did it accelerate during the pandemic, but it’s growing really fast for a segment as large as it is. There’s really building interest in this,” Perrin added.

AMZN is expected to reach a market share of 12.8% by 2023, eMarketer forecasts. The e-commerce titan generated almost 90% of its ad revenue by ads that appeared on its e-commerce platform.

Separately, Amazon has made a step forward with its search ad business, which is expected to grow to $14.53 billion. This way, the search ad business will grow to 19% from 13.3% in 2019. Google is the absolute market leader in this category with a market share of 56.8%.

“You can see Amazon gaining share, Google losing share, and Facebook stable and gaining a tiny bit. A big reason for that is Facebook isn’t doing search ads and that’s where Amazon is really competing.”

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