Amazon ad revenue grows 23% in the first quarter

Amazon this week released the first quarter results for 2022. Amazon’s ad revenue  was $7,877 million in Q1 2022. A growth of 23% Y/Y, but a decline of 18% when compared to the previous quarter. Last year, the decline from Q4 to Q1 was 13%.

“Recent challenges including inflation, rising costs and supply chain issues have impacted e-commerce brands across the board, and Amazon has been no stranger to these disruptions. However, while the e-commerce leader posted decreased revenue earnings today, the company remains one of the top global retailers, proving that they’re doing something right for their consumers,” said Brent Ramos, Director of Product, Search at Adswerve, commenting the first quarter results.

Lisette Huyskamp, CMO at Productsup, commented that Amazon, “as a company with a huge retail operation of its own, has a unique advantage over its main competitors, Meta and Google, in the advertising space. It doesn’t have to bear the same operational costs as other advertising platforms and has direct access to customers through its extensive third-party network. Amazon’s advertising unit will likely become a bigger revenue driver as the company continues to build up that segment of its business."

Amazon net sales outside the US declined 6% Y/Y. Online store sales declined 3% Y/Y. AWS (cloud) was the business that grew more: 37%.

Amazon expects net sales to be between $116.0 billion and $121.0 billion in the second quarter, a growth between 3% and 7% Y/Y.

“Coming on the heels of shuttering brick and mortar operations, Amazon’s earnings this first quarter further reveal the e-commerce and retail struggle to keep products in stock on store shelves for consumers eager to make purchases. Even though Amazon’s revenue is up, their operational income still reflects the challenges they face,” commented Randy Mercer, VP of Global Product Management at 1WorldSync. “The e-commerce industry has seen a boom in the past years, but has shown signs of tapering off with the U.S. e-commerce market growing 14.2% last year. Not only is having products in stock important for retailers to secure the tightening consumer budgets, but the content information that is being published on e-commerce sites greatly influence a consumer’s decision to purchase from a retailer. Navigating the supply chain disruption will be a continuous challenge brands and retailers must workaround to keep revenue from falling.”