Dive Brief:

• Amazon is projected to generate $4.61 billion in U.S. ad revenue in 2018, which is higher than the $2.89 billion previously forecast in March, according to an eMarketer analysis released today and provided to Marketing Dive. The new forecast shows Amazon with a 4.15% share of the U.S. digital ad market. The company also now ranks No. 3 among digital ad platforms in the U.S., besting Oath and Microsoft for the first time. 
• EMarketer also revised its Amazon mobile projections, with the platform expected to garner $1.61 billion in net mobile ad revenue in 2018, a 242% increase over 2017. This gives Amazon a 2.1% share of the mobile ad market in the U.S. 
• Google (37.1%) and Facebook (20.6%) will control a combined 57.7% of U.S. digital ad revenue this year. That’s down from 59.1% last year. 

Dive Insight:

As Amazon snaps up a larger share of the digital ad market, it is posing a looming threat to Google and Facebook, the so-called digital duopoly, which dominate the market. This could be good news for marketers, who have long wanted a viable third digital ad platform to increase competition in the marketplace. While Amazon’s share remains small alongside Facebook and Google, the duopoly’s share is shrinking, as the eMarketer forecast shows. Amazon's unique combination of hardware and services that are popular with consumers, including video, voice and e-commerce is also a threat to smaller platforms like Microsoft and Oath. 

EMarketer reports that Amazon has seen strong organic growth in ad revenues. Accounting changes are also behind the revised ad revenue forecast, with some ad services reclassified as revenues. Amazon reported $2.2 billion in “other” revenue for Q2 2018, a 129% year-over-year increase. More than half of consumers begin their product searches on Amazon, over other platforms like Google. This gives advertisers the opportunity to reach consumers at the beginning of their shopping session, when they are still making product decisions. 

Amazon’s surging mobile ad revenue business is also noteworthy, especially with the holiday shopping season coming up. The company’s mobile share could continue to grow as on-the-go consumers shop via mobile more frequently. Early forecasts for the upcoming holiday season point to mobile driving 68% of e-commerce traffic and Facebook gaining the most from big holiday ad budgets. 

EMarketer's revised forecast suggests that Amazon's investments in its ad offerings are paying off. This month, reports surfaced that Amazon is testing an attribution tool that allows advertisers to compare how effective ads on its sites are compared to those on other sites. Amazon also introduced a “sponsored” video placement in its Prime Pantry service. The company also announced plans to increase the size of its Boulder, Colorado-based advertising hub.