[eMarketer] Amazon has a larger advertising business than YouTube

Amazon’s advertising revenues rose 32% in Q4 2021 to $9.72 billion, reaching $31.16 billion for the year, per the company’s earnings release. The Q4 growth was actually a slowdown from increases of 52% in Q3 and 88% in Q2, when the retailer hosted Prime Day.

This was the first time the retail giant broke out its advertising revenues.

Amazon’s ad business generated more annual revenues than the company’s physical stores ($17.08 billion) and roughly the same amount as Amazon Prime and its other subscription services ($31.77 billion). Amazon announced last week that it is increasing the cost of Prime to $139.

The business is larger than YouTube’s ad business, which grew 46% to $28.85 billion last year, per a filing from parent company Alphabet.

Amazon sees ample room for ad growth: “We’re excited to continue innovating in areas like sponsored ads, streaming video, and measurement. Of course, advertising only works if we make it useful for Amazon customers. When we create great customer experiences, we build better outcomes for brands,” said Brian Olsavsky, Amazon’s CFO, during the earnings call.

According to eMarketer,  Amazon’s first-party data on consumer shopping and purchase habits offer it an advantage over the more general online behavioral data that Facebook and Google provide.

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