Amazon’s ad business is a “multi-billion dollar program” and accelerating, the company’s chief financial officer Brian Olsavsky said on Thursday’s quarterly earnings call. Amazon reported ad sales under “other revenue,” which posted $2 billion in net sales during Q1 2017—18% more than the ever-important Q4 holiday period and an increase of 132% year-over-year.
What’s driving Amazon’s ad business? Traditional large brands, according to Gartner L2’s Amazon Marketing Playbook. Of the top-ten brands with the greatest ownership of Amazon ads, traditional brands account for 76% of Headline Search Ads and 63% of Sponsored Product ads.
On a brand level, Levi’s, Dockers, Garnier, Olay, Kleenex, Bounty, Gillette, Johnson & Johnson, and Oral-B account for the greatest ownership of Amazon ads among traditional brands.
With 56% of consumers using Amazon as the starting point for product research, brands are shifting ad budgets to the e-commerce giant in an effort to capture shoppers’ attention. Amazon offers four types of ads, two of which (Headline Ads and Sponsored Products) are tied to keywords that brands can run paid product placements on. The Gartner L2 report explains how brands use Amazon’s different ad products and analyzes the effectiveness of different Amazon marketing strategies.