Nikita Mishra
Feb 03, 2023

Amazon's ad revenue surges to US$11.6 billion in Q4

While Google and Meta deal with slowdowns, Amazon's advertising business, still a small fraction of the overall sales, grew 19% in the fourth quarter

Amazon's ad revenue surges to US$11.6 billion in Q4

Exceeding Wall Street expectations, Amazon has delivered a stronger-than-projected Q4 earnings report amid what CEO Andy Jassy remarked “an uncertain economy”.


With the holiday shopping season, fourth quarter is historically Amazon’s strongest; this time the company posted Q4 revenues to the tune of US$149.2 billion, up 9% year-over-year, beating the Street prediction of US$145.4.


Net income of US$278 million (or 3 cents/share), compared with US$14.3 billion a year earlier, was impacted by costs, one-time charges and a decline in the value of Amazon’s investment in electric-vehicle maker Rivian. Sales in the online stores segment contracted 2% year-over-year, largely due to the return to normalcy and physical stores.


Given the inflationary headwinds facing big tech, the recent slowdowns at SnapGoogle parent AlphabetMeta, and Amazon’s own mass lay-off crisis, the results are better than expected.


Whilst slower advertising spends are hurting other tech giants, the ecommerce kingpin seems to be bucking the trend with Q4 ad revenues bringing in US$11.6 billion in sales, marking a 19% year-over-year increase. Advertising still remains a small fraction of the total revenue for Amazon, and the bulk of its ad revenues are related to the ecommerce business, the company sees it as an area of rapid growth with the potential of becoming a crucial player in the digital ad market.


In a lengthy Q4 release, the company highlighted a number of its entertainment releases, including its big bet shows such as Dr. Seuss Baking ChallengeMy Policeman, starring Harry Styles among others. Amazon especially spotlighted Wednesday, the Netflix mega-hit produced by its MGM division for debuting at the number one spot on Nielsen’s weekly streaming charts.


In the earnings call with analysts, CFO Brian Olsavsky maintained that entertainment will become an important piece of the company’s future. “Along with competitive pricing, broad selection and faster delivery speed, we’ve seen Prime members respond to our expanding entertainment offerings,” he said, calling out NFL Thursday Night Football and Lord of the Rings.

(This article first appeared on Campaign Asia)

Campaign India

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