An Amazon contract worker stacks packages onto a luggage cart outside an apartment building in New York, US, on Tuesday, April 16, 2024. 

Angus Mordant | Bloomberg | Getty Images

Amazon reported 24% growth in its advertising unit on Tuesday, the latest sign that the digital ad market is continuing its rebound.

Ad revenue climbed to $11.8 billion in the first quarter from $9.5 billion a year earlier. Analysts were expecting Amazon’s ad business to bring in $11.7 billion, according to StreetAccount.

Amazon reported $143.3 billion in total revenue for the period, up 13% from a year ago. While online retail and cloud computing are still bigger businesses for Amazon, the company is counting on ads for more growth and profit as expansion slows elsewhere.

Digital advertising companies have started growing again after a brutal 2022, when brands reeled in spending to cope with inflation and rising interest rates. Meta, Snap and Google parent Alphabet all reported first-quarter results last week and showed better-than-expected revenue growth, which was primarily driven by improvements across their ad businesses.

Meta, the first in the group to disclose results, reported a 27% jump in first-quarter revenue to $36.5 billion, the strongest rate of expansion since 2021.

Alphabet followed, reporting ad revenue for the first quarter of $61.66 billion, up 13% from the year prior, with YouTube ad revenue jumping 21% to $8.09 billion. The company as a whole grew 15%, a rate last seen in 2022, and the stock shot up 10% on Friday, the sharpest rally since 2015.

Snap shares rocketed 28% on Friday after the company reported a 21% increase in revenue to $1.19 billion, the strongest growth in two years. In each of the company’s past six quarters, sales either grew in single digits or declined.

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