After Amazon Posts 26% Q3 Ad-Revenue Jump, CEO Andy Jassy Says Tech Giant Has “Barely Scraped The Surface” With Madison Avenue

As it grew into a tech behemoth over its first two decades, Amazon was regarded as a sleeping giant in the digital advertising business, largely ceding the market to the duopoly of Facebook and Google.

It is now very much awake, and CEO Andy Jassy believes it has “barely scraped the surface” of the opportunity.

In its stellar third-quarter earnings report Thursday afternoon, Amazon said its advertising services business jumped 26% from the same quarter a year ago, topping $12 billion. (That outpaced the 13% growth rate for total revenue, which hit $143.1 billion.) Advertising is now more than twice the $5 billion size of just three years ago, thanks in part to the 2022 arrival of NFL Thursday Night Football as a Prime Video exclusive.

Last month, Prime Video also said it would begin running ads on movies and shows, part of a more comprehensive effort to position the company’s many platforms as ad vehicles. Amazon has recently become an anchor tenant at the NewFronts in New York, a springtime week of pitches by digital platforms to brand marketers held on the eve of the traditional TV upfronts.

Speaking on the company’s quarterly earnings call with analysts today, Jassy called out the success of the NFL, which has seen a 25% rise in viewership through the first six games this season. The exec also sees the company making operational strides.

“We’re doing much better on the advertising side than we did in our first year,” Jassy said, calling the NFL “a property that’s really valuable. … Advertisers want to be in front of customers” and most customers watch football. In its earnings release, Amazon said its NFL viewers are 47 years old on average, seven years younger than those watching on linear TV.”

Looking beyond sports, Jassy said Amazon’s nature as a tech company brings advantages to all ad buyers. “Most of our resources on the advertising side are in machine learning and creating algorithms” designed to help improve targeting and deliver insights about effectiveness, he said.

Ads delivered with support from these tools “perform better,” Jassy asserted. Ad buyers evaluating their options “are going to choose the one with better results, that perform better.”

Overall, he continued, “We have barely scraped the surface when it comes to better figuring out how to integrate advertising into video and commerce and groceries.” He said it is “still pretty early” in the company’s push into advertising, “but its grown well and we’re really focused on making a great customer experience.”