Amazon.com, Inc. (NASDAQ:AMZN) ad revenue is set to soar in 2018, and should continue to do so through the next few years, according to JPMorgan.
Business Insider has the details from a recent bullish report from the major Wall Street analyst:
Amazon’s ad revenue could reach $4.5 billion in 2018, a 61% increase from $2.8 billion in 2017, according to JPMorgan.
Additionally, Amazon’s ad revenue is projected to grow at a compound annual growth rate (CAGR) of 55% in the two years through 2019, to reach $6.6 billion, according to the note.
The firm noted that Amazon’s estimated 90 million U.S. Prime subscribers will likely drive big brand ad spend, considering the much larger amount of money they tend to outlay for Amazon purchases over non-Prime members. AMZN is also planning a major ad tool launch this year, adding new spots for marketers to target, and giving them more in-depth analytics to drive purchasing decisions.
Finally, recent evidence points to major brands planning to spend much more on Amazon ads this year. WPP, the largest ad purchaser on earth, plans to up its Amazon buys by up to 50% this year, per the Wall Street Journal. Meanwhile, the second largest ad buyer, Omnicom, could double its Amazon ad budget over the next couple of years.
Amazon.com, Inc. shares closed at $1,305.20 on Friday, up $28.52 (+2.23%). Year-to-date, AMZN has gained 11.61%, versus a 4.14% rise in the benchmark S&P 500 index during the same period.