Amazon ad rates soar on rising demand | WARC | The Feed

Amazon ad rates soar on rising demand

If online e-commerce generally was one of 2020’s big winners, then it’s perhaps not entirely surprising that Amazon has had, and is still having, a rather good pandemic - Amazon’s search ad rates reflect this. 

Demand for advertising has rocketed, according to research from MarketPlace Pulse, and this has driven up advertising rates on the e-commerce giant’s platform by over 50% in May, compared to the same month in 2020.

The details

• Advertising on Amazon now costs, on average, $1.20 per click. That’s up 30% from $0.93 at the start of the year and up over 50% year-over-year. The lowest price was $0.70 in May last year, when the pandemic caused disruption to many supply chains, which resulted in a number of brands running out of stock and so cutting advertising. 
• Global shoppers are expected to spend an estimated $578 billion on Amazon. The report says its findings of increasing ad rates are not confined to the US, but consistent across markets globally.
• Amazon has turned most widgets on its site along with those in its app into paid-for advertising inventory. Big brands are increasingly spending more of their advertising budgets with Amazon, researchers found, and the result is they can afford to compete for limited ad space, and this bidding drives up prices further. The report points out the same thing happened with Google and Facebook.

Key quote

“Prices will continue to rise over time. Smaller brands trying to enter the market, it will be increasingly expensive to do it when they are up against established brands who are willing to pay to protect market share.” Juozas Kaziukenas, founder and chief executive officer of Marketplace Pulse, speaking to Bloomberg.

Sourced from Marketplace Plus, Bloomberg