Amazon’s Ad Revenue is flourishing

While the number of businesses selling their products on Amazon is steadily increasing, Amazon’s advertising platform helps brands and sellers stand out from the crowd. 

According to Amazon’s financial reports, Advertising has become their fastest growing sector, even surpassing their popular subscription service “Prime”. Not only did they surpass their own service, but also another big player in the advertising field: Youtube. Amazon reported that their ad revenue of 2021 totaled $31 billion, while Youtube’s ad revenue of 2021 came out to $28.8 billion. 

But…The Return on Advertising Spend (ROAS) is decreasing

Despite the fact that the ad revenue is flourishing for Amazon itself, the ROAS for Amazon Advertising campaigns is on an ongoing decline, reaching an all time low in Q4 2021. According to our own analysis Amazon Advertising now generates an estimated return of 6.4, compared to 10.2 in Q1 of 2019. 

What does that mean for Advertisers?

A decrease in the Amazon Advertising ROAS leads to lower margins for your business. Campaign optimization becomes even more critical than ever before. It also means that advertisers should continuously check the profitability of campaigns. With a ROAS of 6.4, for every sold unit generated via Amazon Advertising the ad spend makes up for 15.6% of the generated revenues on average. Thus, every advertiser should be aware of the role of Amazon Advertising along the customer journey. 

In times like these, you do not want to have another factor negatively impacting your success. To help you reach your full potential, we collected 10 valuable tips that will keep your Amazon Advertising campaigns profitable. 

Download our Whitepaper now and – Get your ROAS back!

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How can metoda help you to get your ROAS back?

Our Amazon Advertising Agency, a proven team of Amazon PPC experts, can help you with your Amazon Advertising needs. From working out smart strategies to achieve your individual goals to campaign implementation and optimization for Sponsored Ads and Amazon DSP – we have got you covered!

If you want to manage your campaigns by yourself, but you’re unsure if your campaign setup is properly optimized, then look no further than our Amazon Advertising Tool. Easy campaign management & efficient optimization for Sponsored Ads powered by Artificial Intelligence: Scale up your Amazon PPC with our smart Ad Optimizer.