- Amazon.com Inc’s AMZN May advertising rates surged 55% year-on-year to $1.16 per click, insinuating the sustainability of the e-commerce retailer’s rising profitability during the upcoming summer sale Prime Day holiday shopping season, Bloomberg reported.
- Amazon’s advertising cost rose to over 30% of the product price, up from around 20% a year ago.
- However, the ballooning ad rates could drive the regulatory initiative to charge higher taxes from Amazon and higher prices by the e-commerce platform merchants when they were already struggling with higher shipping costs and other inflationary pressures.
- The pandemic-induced online shopping growth triggered greater advertising competition on Amazon.
- EMarketer Inc estimated global shoppers to spend around $578 billion in 2021.
- Procter & Gamble Co PG and Clorox Co CLX bring billion-dollar advertising budgets to Amazon to maintain their dominance on the online sales shift.
- EMarketer estimates Amazon’s U.S. advertising revenue to beat $20 billion in 2021 as it continues to win market share from digital advertising leader Alphabet Inc GOOG GOOGL Google.
- Companies like Thrasio, Perch, and Branded have announced debt and investor funding of over $2 billion to buy and expand Amazon brands, with advertising a key tool for growth.
- Amazon aggregator Elevate Brands CEO Ryan Gnesin endorses the retailer despite its high ad rates compared to Facebook Inc FB and Google to capitalize on Amazon shoppers’ readiness to buy.
- Price action: AMZN shares traded higher by 0.75% at $3,289.50 in the market session on the last check Wednesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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