news: Amazon pulled the record $9.48 billion Ad revenue fell last quarter, but the retail e-commerce giant is freezing its advertising business ahead of what is expected to be a calm shopping season for the holiday season. Bloomberg reports that the company will fill vacancies but won’t create new jobs.
Slowdown: Amazon shares have plunged after predicting a slowdown in sales growth over the holiday season. The company has been seeing signs of a slowdown in consumer spending for some time and is curbing hiring to generate as much profit as possible in the final quarter of the year.
- Advertisers have been watching consumer spending closely in recent months, waiting for unusually high inflation to abate.and we still Vacation spending expected to increase by about 7%spend more on experiences and less on retail.
- Amazon is already feeling the effects.the second prime day last month pale in comparison Household spending is down 40%, according to Klover data analysis.
- The duration of holiday sales has also increased, making holiday advertising less effective. 45% of merchants He said he is encouraging consumers to start shopping sooner. End-of-the-year discounts and sales that drag on throughout the season reduce the sense of urgency, making consumers spend less or wait longer to purchase.
- All of these factors could help Amazon merchants reduce their advertising spend on the platform this holiday season.
Amazon Ad Takeover: Still, despite a slower-than-usual holiday shopping season, it’s surprising that Amazon has hit the pause button on its profitable and growing advertising business.
- It’s been a tough year for advertising overall, but especially for big tech companies like meta Economic concerns and addressability issues in the digital advertising market are driving down revenue. However, Amazon not only maintained the environment, but also succeeded in increasing its advertising market share.
- In the United States, Amazon’s advertising revenue is projected to be the third highest of any company ($29.1 billion), behind the meta Google.
- Many advertising companies were overstaffed during the pandemic and then had to implement mass layoffs. Amazon itself is guilty of that, as it hired more people to meet the demand of the pandemic and found itself understaffed when the market cooled.
Our view: Amazon’s advertising business isn’t going anywhere, but year-end spending and fears of a general economic slowdown are slowing the company’s performance.
- Job cuts may mean Amazon takes more time to launch new advertising products and tools, but it can squeeze out more profits, a major course-correction should the economy take a turn for the worse. It also means that you don’t have to do
