Although Amazon has its hands in a lot of businesses, not a lot is known about what it does in advertising. Now, the company has given the public an idea of how their advertising busiess goes as Amazon has just revealed how big its advertising business grew in 2021.
According to Amazon, its advertising business generated $31.2 billion with Q4 sales hiking by 32%.
Amazon Shares Ad Business Revenue
Amazon's Q4 earnings statement, according to BusinessWire, showed that its lesser known advertising business was able to generate revenue of $31.2 billion in 2021. It should be noted that Amazon has been investing in its advertising business but preferred to keep the details private.
To put into perspective how big Amazon's advertising business earned, Microsoft's CEO, Satya Nadella, revealed that the company only earned an excess of $10 billion in revenue from the company's advertising in 2021.
Amazon Beat Microsoft, Pinterest, and Snap's Advertising
Not only did Amazon beat Microsoft, the company also outperformed Pinterest and Snap as well. Pinterest earned $2.58 billion while Snap earned $4.12 billion in revenue in 2021. Amazon's advertising standards, however, remain small as it only represents 7% of the total Q4 revenue, per the company's earning statements.
According to the story by CNBC, advertising brings in twice the revenue that the company makes on physical stores. Amazon's advertising is also said to be quite big in comparison to the company's subscription services. These services include Amazon Prime memberships.
Amazon Aims to Make Advertising More 'Useful for Customers'
Amazon's finance chief, Brian Olsavsky, stated that the company is excited when it comes to continuous innovation in different areas, including streaming video and sponsored ads.
In addition, Olsavsky also noted that "advertising only works if we make it useful for customers. When we create great customer experiences, we build better outcomes for brands."
Amazon has yet to brief investors when it comes to what information to expect regarding the total size of the company's advertising operations. In addition, the news is said to be reportedly more surprising compared to 2015 when Amazon "started reporting revenue and operating income from the Amazon Web Services cloud division, which now represents about 13% of overall revenue."
Amazon Web Services
Amazon's previous finance chief, Thomas Szkutak, told analysts in Jan. 2015 that the company expected to change their reportable segments to report "North America, International and Amazon Web Services beginning with first quarter 2015."
Just a few months later, Amazon came out with the AWS results. The results came from four previous quarters and aims to "help analysts understand how the unit has developed over time."
It should be noted that the company has yet to disclose its advertising services segment's operating income.
Olsavsky also said that, although he was unable to scale, there is actually a sizable amount of advertising done in connection to the company's Prime Day.
Amazon's founder and previous CEO, Jeff Bezos, previously said that he had changed his minds regarding Amazon advertising its own products in 2018.
Related Article: Meta's $10 Billion Loss in 2021 Shows Facebook Spending Massive Amounts to Look for Next Stage of Growth
This article is owned by Tech Times
Written by Urian B.
