In Q4 2023, Amazon witnessed a 27% year-over-year growth in advertising sales, totaling $14.6 billion, as outlined in its earnings release. The company’s overall net sales for the quarter surged by 14% to reach $170 billion.
According to Nielsen data shared by Amazon, viewership for the second season of “Thursday Night Football” on Prime Video increased by 24% year-over-year, with a notable 14% growth in the 18-to-34-year-old demographic.
In addition to its robust financial performance, Amazon introduced Rufus, a generative AI-powered conversational shopping experience. Executives anticipate that generative AI will play a significant role in generating “tens of billions of dollars” in revenue over the coming years.
During an earnings call, Amazon executives attributed the strength in advertising growth to sponsored product ads, with a particular surge in streaming TV advertising, recently expanded to Prime Video.
CFO Brian Olsavsky emphasized the focus on increasing ad relevancy by leveraging machine learning and improving measurement capabilities. Amazon has introduced over 15 new advertising capabilities to enhance insights, planning, activation, and optimization across its suite of ad products. The U.S. market recently saw the addition of a sponsored TV offering with a self-service solution for brands, featuring no minimum spend and expanding the reach to Twitch, Freevee, and Fire TV.
“Thursday Night Football” continued to be a success for Amazon, with increased viewership, particularly during a Black Friday football game, where viewership rose by 24% year-over-year, leading to significant gains in ad sales.
CEO Andy Jassy expressed confidence in the potential of Prime Video as a large and profitable business, with continued investments in compelling exclusive content for Prime members. While advertising on Prime Video is still in its early stages, executives believe it will be a crucial aspect of the business model, contributing to meaningful investments in content over time.
The latest figures highlight Amazon’s dominance in the retail media networks arena, a space projected by Dentsu to be the fastest-growing among digital channels in 2024. In a separate announcement, Amazon introduced Rufus, a conversational shopping experience powered by generative AI, expected to roll out to all U.S. customers in the coming weeks. Amazon remains optimistic about its growing generative AI initiatives, foreseeing significant impacts across e-commerce, advertising, AWS, and beyond.