Amazon Hiked Search Based Advertising Prices: CNBC

  • Amazon.com Inc's AMZN cost per click for search advertising was $1.27 in August, up 47.7% year-on-year, CNBC reports.
  • Amazon is also concealing the companies' listings in search results which are not paying the toll. Sellers are paying more overall to Amazon for transaction fees and fulfillment services.
  • Brands are reportedly spending 50% or more of their product price on various fees to be selling on Amazon, Marketplace Pulse's Juozas Kaziukenas told CNBC.
  • The growth of Amazon aggregators, venture-backed companies raising big money from outside investors to acquire independent sellers has led to Amazon's ad price rice surge. Additionally, some smaller sellers' doubts against deep-pocketed aggregators are contributing to Amazon's gains.
  • Amazon's "other" sales were the fastest-growing part of its overall business in Q2, with revenue soaring 87% Y/Y to more than $7.9 billion.
  • Amazon, which previously promoted two or three sponsored products at the top of search results, now shows six sponsored products.
  • Amazon eclipsed Microsoft Corp's MSFT ad revenue in 2018, trailing behind Alphabet Inc GOOG GOOGL and Facebook Inc FB.
  • Amazon spokesperson told CNBC that it has no dedicated ad slots within search results and added that ads improved the visibility of brands.
  • Sponsored product ads accounted for 73% of retailers' ad spend on Amazon in Q2. 
  • Amazon began replacing product recommendations in listings with product ads in 2020. The e-commerce giant has also added new ad formats like video ads and sponsored brands posts.
  • Price Action: AMZN shares traded lower by 1.98% at $3,394 in the premarket session on the last check Monday.
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