Internet retailer Amazon claims to offer "Earth's Biggest Selection", a mammoth range of products which now goes far beyond books and music to include anything from automobile parts to groceries and from clothing to household furniture. An increasing number of these products, especially in the fashion and personal care sectors, are now own-label rather than third party brands. The business is firmly established as the #1 internet retailer worldwide (though it faces increasingly strong competition from Chinese rivals Alibaba and Tencent, operating mainly in Asia). No other company has done so much to establish the reliability and functionality of e-commerce. But Amazon also historically suffered from low profit margins, and rival companies tended to outpace it in earnings growth. That laggard performance appeared to change after 2007, helped along by the launch of the Kindle electronic reader. Huge subsequent investments in infrastructure and technology prompted another slump in profitability in the 2010s. However, the evolution of the Kindle device and its various offshoots, including the Echo home speaker, the Alexa AI virtual assistant and the rapid evolution of the Prime membership club has seen the emergence of a new role for Amazon as an entertainment broadcaster and creator. It has also diversified aggressively, not least through a deal in 2017 to acquire bricks and mortar organic grocery retailer Whole Foods Market for almost $14bn. At the same time, the group expanded its technological infrastructure to become one of the global leaders in cloud storage (though AWS or Amazon Web Services). It also made a renewed commitment to increase its profit, not just its revenues. As a result, after a comparatively slow start it has become a diversified technology giant on a par with rivals as such as Apple, Google and Facebook as well as a financial powerhouse. The resulting effect on its stock price in recent years has elevated founder and CEO Jeff Bezos to the role of the world's richest man. He also owns the Washington Post newspaper. Amazon's revenues rose by almost a third in 2018, and by another fifth in 2019 to $280.5bn. Net income hit new highs of $11.5bn. The AWS cloud storage division alone accounted for more than three-quarters of profits but only 12% of group revenues. The group disclosed that physical store sales - primarily Whole Foods - were down very slightly year-on-year at $17.2bn. Amazon is also now one of the world's biggest advertisers by expenditure as well as the #3 in digital ad revenues after Google and Facebook.
Capsule checked 28th March 2019
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Historical profile information for Amazon
Adbrands Daily Update 18th Nov 2020: As has been anticipated for at least the past two years, Amazon officially entered the prescription retail business this week with the launch of Amazon Pharmacy in the US. This new service is built on the platform provided by online pharmacist PillPack, acquired by Amazon two years ago. Amazon Pharmacy will offer Prime subscribers savings of up to 80% on generic and 40% on brand name medications. Customers will still need a prescription from their physicians, as with any standard pharmacy, and a wide range of common medications are being dispensed. However, Amazon won't sell opioids or any other drugs that are a higher risk for theft. The launch prompted a sharp fall in the share price of traditional pharmacies.
Adbrands Daily Update 2nd Nov 2020: "The Show Must Go On". Quite a different style of campaign here for Amazon from UK agency Lucky Generals. In recent years, Amazon and the Generals have tended to go for jolly singalong spots for the holiday season; but this year's could in truth be for almost any advertiser, the Amazon branding is so low key. However, it acknowledges more directly than most of the other seasonal ads to-date the sort of Thanksgiving and Christmas we will be forced to endure this year. French-born but US-based ballerina Tais Vinolo stars. It's a heart-warming story, told with sensitivity and style, designed not so much to sell a particular product (even portable spotlights) but to put a fuzzy halo around the Amazon brand.
Adbrands Daily Update 10th Sep 2020: Amazon named Ukonwa Ojo as chief marketing officer of its entertainment division, comprising Amazon Studios and the Prime Video service. It's a bold and intriguing choice: Ojo has spent most of her career in the packaged goods industry, most recently beauty. She joins from Estee Lauder's MAC Cosmetics where she was CMO; before that she led marketing for Coty's consumer beauty business. Previous roles include stints at Unilever, Reckitt Benckiser and General Mills.
Adbrands Daily Update 29th Jun 2020: Amazon has agreed to acquire US self-driving car developer Zoox to boost its autonomous delivery program. The deal is reported to be worth around $1.2bn, well below the $3.2bn valuation of Zoox in its last round of fund-raising. The tech company has been working on a self-driving electric taxi, which could now be adapted to deliver packages for Amazon.
Adbrands Daily Update 23rd Mar 2020: Disney, Netflix, Amazon, Google's YouTube and Facebook have all agreed to downgrade streaming quality by at least 25% throughout Europe to reduce the pressure on broadband networks during Coronavirus lockdown. Demand is now reaching peak levels throughout the day because of home working and an even greater requirement for entertainment, and is expected to hit new highs this week with the launch of Disney+. Disney even agreed to a request from the French government to delay the launch of its streaming service in France for another two weeks until early April.
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