Amazon's fourth quarter earnings report revealed that the company's advertising services unit had a successful quarter, bringing in $11.6 billion in sales and representing a 19% year-over-year increase. This is despite the fact that two of the leading digital advertising companies, Alphabet and Meta, reported a slowdown in their respective fourth quarter results, with Meta's sales dropping 4% and Alphabet's ad revenues decreasing by 3.3%.
Amazon's advertising business is still a small fraction of the company's overall revenue, but it is growing rapidly and is expected to become a major player in the digital advertising market. According to a recent survey by Insider Intelligence, Amazon has 7.3% of the online ad market, placing it just behind Alphabet's Google and Meta-owned Facebook and Instagram.
However, the company's growing advertising business has not gone unnoticed by regulators, who are monitoring Amazon's dual role as both a marketplace and a competitor to merchants selling on its platform. It remains to be seen how this scrutiny may impact Amazon's advertising business moving forward.