Amazon has now posted two consecutive quarters of triple-digit growth in its “Other” segment, which consists primarily of revenue earned from advertising, according to yesterday’s earnings release. This segment is expected to surpass $10 billion in revenue this year, making it Amazon’s smallest but fastest growing business.
At Gartner L2’s Digital Leadership Academy earlier this week, which brought together 500+ marketing executives, brands across categories commented on their growing confidence in Amazon’s ad platform.
The heightened presence of brand ad dollars on Amazon was highly visible during this year’s Prime Day. Philips, Proctor & Gamble, Reckitt Benckiser, and other large enterprises ran big display ad campaigns promoting their deals.
Meanwhile, Amazon’s “Subscription Services” revenue (which includes Prime memberships) is re-accelerating. As Amazon saturates core categories like electronics and books, it will be important for the retailer to increase its share of Prime members’ wallets in other categories such as groceries and fashion.
Speaking of groceries, Amazon’s “Physical Store” sales (which includes Whole Foods) topped $4.3 billion in the second quarter, up 1.3% quarter-over-quarter. This represents slightly faster growth than Amazon’s overall e-commerce business.
Across its businesses, Amazon has a lot of momentum coming out of Prime Day and is expected to post another strong earnings report for Q3.