Amazon has steadily been growing its advertising business, and a new note from Wall Street firm Cowen suggests that the e-commerce giant is targeting smaller sellers with tools and lower ad prices.
Cowen interviewed two Amazon advertising consultants, who noted that Amazon has made “significant” improvements in ad-tech over the past year.
The consultants also viewed Amazon’s increasing focus on private labels as less competitive than similar efforts from traditional retailers.
Amazon continues to ramp up its burgeoning advertising business to compete with Facebook and Google.
While advertising only represents a fraction of Amazon’s revenue, the e-commerce giant has been making moves to grow its advertising business, including hiring for new teams and staffing up in New York.
Over the past year, Amazon has rolled out new video ad formats, pushed into connected TV, and built out programmatic tools that place ads on websites outside of Amazon. During its recent second-quarter earnings, Amazon reported $3 billion in advertising revenue, representing a 37% year-over-year growth.
Read more: Amazon wants to disrupt the $100 billion gaming industry, so it’s hiring for a ‘stealth advertising’ engineering team
In a new research note, Wall Street firm Cowen said that advertisers have seen “significant” improvements with Amazon as a result of the new tools. The note is based off of interviews conducted with two Amazon advertising consultants who used to work at Amazon.
One of the reasons why both consultants noted better performance with Amazon was lower costs. Amazon recently lowered the threshold price of buying advertising to below $10,000 per month. Previously advertisers were required to spend “several multiples higher,” according to Cowen’s note. The advertising consultants said that the lower prices particularly helped third-party sellers, which are brands that sell their own items on the platform, increase ad spend.
The consultants also said that Amazon representatives are helping small advertisers …read more
Source:: Business Insider