Here is Amazon Ad Revenue (Total Ad Spend) as a % of its GMV. You could call this TACOS across all advertisers, although non-endemics will muddy this a tiny bit.

While Sponsored Ads load may have reached saturation, DSP is probably the driver behind the rise of this metric over the past couple of years. As Amazon expands ad inventory across its various assets (Prime Video, Thursday Night Football etc.), DSP will continue to drive this metric up.

The question on my mind is what is the current mix of Amazon Sponsored Ads Vs DSP revenue.

Here is my rough math. Feel free to poke holes 😀.

🔹 BIG ASSUMPTION: The 2021 number represents the peak potential of Sponsored Ad Revenue as % of GMV. (This would be 2 years after launch of Sponsored Display ads). Let’s call it roughly 5% in steady state.

🔹 DSP contributed the rest in 2023, which would be 6.7% minus 5% (from above) = 1.7%.

🔹 This leads to Sponsored Ads Vs DSP ratio of 75% Vs 25% of Amazon’s ad revenue (5% vs 1.7%)


John T. Shea, Destaney, Patrick Miller, Jason Landro, Jason Boyce, Michael Maher, Daniel, Jon, Jed, Adam, Brent Zahradnik, Ritu Java, George Wescott, Isaac Gross, Liran .. What do you see?

#amazonadvertising #retailmedia

Sources:
🔸 Ad Revenue => Amazon earnings reports
🔸 GMV data => Marketplace Pulse