- Amazon introduced ads on Prime Video earlier this year to boost advertising revenue, though this change has yet to yield the expected gains.
- In the second quarter, Amazon’s ad business grew by only 20%, marking its slowest growth rate in years, despite including video ad revenue for the first time.
- The company continues to remain heavily reliant on traditional sponsored product ads, while gradually rolling out video ads to avoid alienating its Prime Video users.
If you’ve been streaming the latest shows or movies on Prime, you’ve likely noticed that ads are now part of your streaming experience. This change, introduced earlier in the year, is part of a broader strategy to boost Amazon’s advertising revenue. However, the retailer’s effort has yet to pay off, with the actual gains from its ad segment falling short of analysts’ expectations.
In the second quarter of the fiscal year, Amazon’s ad business grew by only 20% — this has been the slowest growth rate for the company’s ad segment in years (via The Information). As expected from such an announcement, the company’s share price dropped at market open. But what’s surprising is that the second quarter — April to June — was the first complete period to include revenue from video ads.