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Amazon Seen Triumphing Over Apple Privacy Policy Changes in Digital Advertising Business

Amazon does not break out its advertising sales, but nestles it in its "other" business segment.

Amazon Seen Triumphing Over Apple Privacy Policy Changes in Digital Advertising Business

For brands selling a physical product, Amazon Ads are a powerful way to drive purchases

Highlights
  • Google and Amazon require a user to already be looking for something
  • Apple's advertising business has surged since it prevented advertisers
  • The iPhone maker will report fourth-quarter results on Thursday

Amazon is expected to emerge as a winner in the digital advertising arena, surviving Apple's privacy changes better than rivals Facebook and Snap. The e-commerce giant's vast trove of customer shopping data reduces its reliance on tracking info once provided by Apple's iOS mobile operating system.

Others including Alphabet, which also collects a rich set of data from users' search habits, reported a 41 percent surge in Google advertising revenue for the third quarter, a sign that businesses that rely less on targeted ads are able to overcome Apple's limits on tracking mobile users.

Amazon, which reports earnings on Thursday, does not break out its advertising sales, but nestles it in its "other" business segment.

"Google and Amazon require a user to already be looking for something, therefore aren't as reliant on cookies," Eduardo Cruz, performance marketing manager at SupplyKick.

"For brands selling a physical product, Amazon Ads are a powerful way to drive purchases, increase product consideration, and reach customers."

Apple's advertising business has surged since it prevented advertisers from tracking iPhone users without their consent in April, eating into market share once occupied by Facebook, Instagram and Snap.

The iPhone maker will report fourth-quarter results on Thursday.

Most Facebook users access the social networking platform through a mobile device, with nearly 15 percent of adults using iPhones and iPads in July, according to data firm Data Reportal.

Twitter, which relies on targeted ads but not as much as Facebook, reported advertising revenue in line with estimates.

Wall Street analysts said since the majority of advertising on Twitter comes from Brands, especially services or digital, as opposed to Direct ads, the company was better positioned to overcome the privacy changes than Facebook or Snap.

To be sure, the digital advertising market is still booming exponentially as the pandemic led to more consumers shopping online and spending more time on social media. Like Facebook and Snap, Google's YouTube saw a modest hit, the company said, primarily in direct-response advertising.

"This is the early innings of a shift that will play out over several quarters," Andrew Lipsman, eMarketer principal analyst at Insider Intelligence, said.

"The strength that we've seen in the past few quarters has remained, but it is starting to shift a little bit between the different players."

© Thomson Reuters 2021


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