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Amazon Ad Revenue Up 24% to $11.8B, Prime Video Boosts Growth

Amazon's ad revenue soars to $11.8 billion, marking a 24% increase amid a digital ad market rebound and Prime Video's advertising expansion.

By Bill Bullington

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4/30, 16:27 EDT
Amazon.com, Inc.
Alphabet Inc.
Meta Platforms, Inc.
Snap Inc.
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Key Takeaway

  • Amazon's ad revenue soared 24% to $11.8 billion in Q1, outperforming the digital ad market with contributions from Prime Video.
  • Prime Video's introduction of ads in multiple markets and exclusive content like NFL games and "Lord of the Rings" series boosts Amazon's advertising growth.
  • Despite a lawsuit over Prime Video ad practices, Amazon MGM Studios' releases like "Fallout" and "Road House" saw significant viewer numbers.

Digital Ad Market Rebounds

Amazon's advertising unit witnessed a 24% growth in the first quarter, signaling a robust recovery in the digital advertising sector. The company's ad revenue escalated to $11.8 billion from $9.5 billion the previous year, slightly surpassing analysts' expectations of $11.7 billion as per StreetAccount. This growth is part of a broader trend where digital advertising companies, including Meta, Snap, and Google's parent Alphabet, have reported better-than-expected revenue growth, primarily driven by their advertising businesses. For instance, Meta reported a 27% increase in first-quarter revenue to $36.5 billion, Alphabet's ad revenue rose to $61.66 billion, up 13% from the previous year, and Snap's revenue increased by 21% to $1.19 billion.

Prime Video Fuels Growth

The significant leap in Amazon's ad revenue has been attributed to the inclusion of commercials in Prime Video across multiple markets. CEO Andy Jassy highlighted the growth of Amazon's Stores and Prime Video businesses as key contributors to the advertising unit's success. Prime Video, boasting over 200 million monthly viewers, introduced advertising in January, reaching an estimated 115 million monthly viewers in the U.S. alone. The service has launched ads in several countries, including the United States, the U.K., Germany, Austria, Canada, France, Italy, Spain, and Mexico. Jassy also emphasized the platform's strong start in streaming TV advertising and its development of exclusive content, such as NFL "Thursday Night Football" games and the "Lord of the Rings" series.

Legal Challenges and Content Success

Despite its advertising success, Amazon faced a lawsuit in February, accusing Prime Video of false advertising and deceptive practices for serving ads unless customers paid an additional $2.99/month. Amazon has not commented on the lawsuit. Meanwhile, Amazon MGM Studios released 20 films and series in the quarter, with notable successes including "Fallout," which attracted over 65 million viewers, and "Road House," drawing more than 50 million viewers in its first two weekends.