Forbes – Leadership: Amazon Ad-Supported Streaming Music Could Double Jeff Bezos’ Ad Business Again

Amazon is currently in talks to release an ad-supported free version of its Prime Music streaming service, according to a report on the weekend. Spotify shares fell on the news, says Reuters, and Apple’s big services push could be affected as well.

But the really big news?

Amazon’s rapidly growing ad business could double again. And that could impact Facebook and Google.

Earlier this year I reported that Amazon’s ad business revenue doubled to $3.4 billion in the last quarter of 2018. That’s still small change compared to Facebook and Google, which raked in $17 billion and $40 billion, respectively, in the same time frame.




But they’re not doubling.

Amazon is sitting on one of the world’s largest troves of product purchase data. It’s using that, and its position as the top e-commerce retailer in the U.S., to drive ad dollars from merchants looking to sell on its platform. The result is that one in three retailers are shifting ad spend from Facebook and Google to Amazon, according to a Nanigans study.

In a study of 1,500 marketers who run ad campaigns, I found that 63 percent of American marketers are planning to increase their ad spend on Amazon. (Full disclosure: I consult for Singular.) I didn’t see any decreases for Facebook and Google, where advertisers are also planning to up their spend, but Amazon’s growth rate was the highest.


63 percent of ad-buying marketers are planning on increasing their ad spend in 2019 with Amazon.

John Koetsier

Add a free streaming music subscription powered by advertising?






Amazon might just be adding rocket fuel to its advertising business.

Radio stations, of course, have been ad-supported for years. That model hasn’t deviated significantly online, and Spotify uses its ad-supported model to drive close to 120 million monthly active users of its services, with relatively fast growth quarter over quarter.

Amazon’s new service, if it actually launches, would retard that growth, and therefore slow Spotify’s paid-user growth as well. But it would also be competitive to offerings from Apple, Google, and other streaming music providers.

And it would suck more ad dollars out of competing global tech giants.

The best thing, from an Amazon perspective? Audio ads would tie neatly into a voice-first mode of computing that the company pioneered with Echo hardware and Alexa intelligence. And consumers have shown some receptivity to audio ads on smart speakers.

Let’s block ads! (Why?)

Source: forbes.com

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