Amazon’s “other” segment, which houses its advertising business, grew 73% YoY to $6.9 billion in Q1.
“The advertising team has done a great job turning clicks into productive sales, and the advertising that results is valuable to us as well,” said Amazon CFO Brian Olsavsky.
While Amazon’s ads business grew due to traffic increases, its ad products have also improved. Video product listings were called out as an area of creativity and growth. Amazon is also using deep learning to make ads more relevant to users.
Amazon says its ad business benefits the entire company. The ads business sells products on Amazon, where it gets a cut. And it helps consumers discover new products, meaning the ads are helpful for people who see them.
Watch shows, buy stuff
Amazon’s content business is also booming.
Hours watched on Twitch doubled over the past year, and it counts 35 million monthly active users.
175 million people watched a Prime Video offering in the past year. That’s seven-eighths of overall users, an analyst pointed out.
Prime Video, however, runs without ads and Amazon explained why in a roundabout way.
“We look at Prime Video as a component of the broader Prime membership, and making sure it drives adoption and retention,” said Dave Fildes, head of investor relations. “It’s a significant acquisition channel.”
Prime Video is a great channel to drive sales and retain customers – and Amazon wants to keep it that way to bolster its core business.
In Brazil, for example, Amazon launched with a video-only membership. Then it added in its free shipping Prime benefits. “It was a great mechanism to get folks into that program,” Fildes said.
On the ad-supported side, however, Amazon touted the deal it struck with the NFL in March to exclusively show Thursday Night Football, and Amazon said it plans on doing innovative things around the games.
Global use of Alexa – where ads only run on Amazon Music – increased through the pandemic. The voice assistant helped people connect with friends and family and turned into a wellness assistant, by tracking users’ health and fitness.
