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A Detailed Look At Trends In Advertising Revenues For Google, Facebook And Amazon

Google, Facebook, and Amazon are some of the largest and most successful companies in the tech world. In 2018, Google, Facebook and Amazon posted total revenues of $137 billion, $56 billion and $233 billion respectively. Despite the multi-billion dollar businesses that these companies run, their growth rates continue to be stellar. Over the period from 2016 to 2018, Google, Facebook and Amazon posted average revenue growths of 23%, 42% and 31% respectively. A common revenue source for all three tech giants is digital advertising, and Trefis captures key trends in their advertising revenues in the interactive dashboard How Does Amazon’s Advertising Business Compare With Those Of Facebook And Google?

Advertising forms a bulk of the total revenues for Google and Facebook, but is a much smaller part of Amazon’s business. However, Amazon’s consumer business has driven strong growth in Amazon’s advertising revenues over recent years. Amazon does not break out its advertising revenue, and reports it as a part of ‘Others’. But the company’s management has indicated that advertising is responsible for most of  ‘Others.’

Over 2016-18, Google, Facebook and Amazon posted total advertising revenue CAGR of 21%, 43% and 85% respectively. While growth in advertising revenues have slowed down for Google and Facebook, Amazon’s advertising revenue growth has been accelerating. Over 2016-18, Google, Facebook and Amazon saw the contribution of advertising revenues to the top line change -3%, 1%, 2% respectively.

We estimate that Amazon’s advertising revenue from the U.S. swelled 120% in 2018, versus growth rates of 36% for Facebook and 19% for Google. The chart below highlights our U.S. advertising revenue estimates for each of these three companies. Based on our estimates, Amazon is the only company to see an increase in revenue contribution from advertising in the U.S. over the period 2016-18.

Additionally, Facebook and Google have seen their market share growth weaken over recent years due to privacy issues. On the other hand, Amazon has benefited from the huge trove of customer data it has. Furthermore, Amazon is able to extract actual purchase-level insights from customer data – allowing it to grab a larger share of the U.S. online advertising market.

Our subsequent articles will focus on the expected growth in advertising revenues for these three companies over coming years.

CFOs and Finance Teams Product, R&D, and Marketing Teams More Trefis Data
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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    Trefis is an interactive financial community structured around trends, forecasts and insights related to some of the most popular stocks in the US. Whereas most finance sites simply give you the facts about where a stock has been and what a company has done in the past, Trefis focuses entirely on the future.

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