Amazon's advertising revenue surges 18% to reach $17.3 billion in Q4 2024
Analysis of Amazon's Q4 2024 advertising performance reveals significant growth and expansion into streaming video advertising services.
Amazon's advertising business demonstrated substantial growth in the fourth quarter of 2024, according to financial results released by the company on February 6, 2025. The e-commerce giant reported advertising services revenue of $17.3 billion for Q4 2024, marking an 18% increase compared to the same period in 2023.
According to the earnings report, advertising services have become an increasingly significant revenue stream for Amazon, with the business now operating at a $69 billion annual revenue run rate. This represents more than double the revenue from just four years ago, when the advertising segment generated $29 billion.
The company's advertising growth spans multiple channels, with sponsored products remaining the largest contributor to advertising revenue. During the earnings call, Amazon CEO Andy Jassy highlighted the expansion of streaming advertising offerings, particularly noting the completion of Prime Video's first year with ads.
"We wrapped up our first year of Prime Video ads, and we're quite pleased with the early progress and headed into this year with momentum," Jassy stated during the earnings call.
The company has developed a comprehensive advertising ecosystem that spans the entire marketing funnel. According to the earnings transcript, Amazon's advertising platform now enables advertisers to execute full-funnel campaigns, from broad reach advertising for brand awareness to targeted sponsored products at the point of purchase.
Amazon's advertising technology infrastructure includes several sophisticated features. The company has implemented audience targeting capabilities that utilize billions of customer signals across its stores and media properties. Additionally, Amazon has introduced new analytical tools, including Amazon Marketing Cloud secure clean rooms and a multi-touch attribution model that helps advertisers understand the effectiveness of different marketing channels.
The multi-touch attribution system provides detailed insights into how various advertising formats contribute to sales. For instance, when advertisers use a combination of streaming TV, display advertising, and sponsored products in their campaigns, the system can analyze the relative impact of each channel on overall performance.
The financial results reveal that advertising services represented approximately 11% of Amazon's total net sales for Q4 2024, which reached $187.8 billion. The advertising segment's growth outpaced the company's overall revenue growth of 10% year-over-year.
Looking at the broader financial context, Amazon's North America segment, which includes advertising revenue, generated $115.6 billion in net sales during Q4 2024, representing a 10% increase from the previous year. The International segment, which also includes advertising services, recorded $43.4 billion in net sales, growing 8% year-over-year, or 9% when excluding foreign exchange rate impacts.
The company's investment in advertising technology and infrastructure falls under its broader technology and infrastructure expenditure. According to the financial statements, Amazon's technology and infrastructure costs for Q4 2024 were $23.6 billion, reflecting ongoing investments in areas such as artificial intelligence and machine learning capabilities that support advertising services.
Amazon's advertising business benefits from the company's extensive customer base and rich data insights. The platform serves various advertising clients, including sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.
The expansion into streaming advertising represents a strategic growth area for Amazon. The company reported that its Thursday Night Football broadcasts on Prime Video achieved an average of 13.2 million viewers in the 2024 season, representing an 11% increase from 2023. This growing audience provides additional opportunities for advertising revenue through streaming content.
Looking ahead, Amazon's first quarter 2025 guidance projects net sales between $151.0 billion and $155.5 billion, representing growth between 5% and 9% compared to first quarter 2024. While the company does not provide specific guidance for advertising revenue, the segment's consistent growth trajectory suggests continued expansion of advertising services across Amazon's various platforms and properties.
These results come at a time when digital advertising platforms face increased scrutiny regarding data privacy and market competition. Amazon's advertising business operates within a complex regulatory environment, with ongoing investigations by various authorities examining aspects of Amazon's business practices, including its operation of its stores and fulfillment network.