Amazon to expand Boulder, Colorado hub as advertising business accelerates

Dive Brief:

Amazon said it is expanding its Boulder, Colorado-based advertising hub into a 37,000-square-foot office in the city's downtown after experiencing major growth over the past year, according to Denver 7, an ABC affiliate.
The company began building its ad team in Boulder in July 2017 and has created more than 1,500 full-time jobs in Colorado at corporate offices and fulfillment centers.
Brian Oslavsky, Amazon's CFO, said the tech giant's ad business is a multibillion-dollar sector and is growing. The new office will help the company support that growth. Oslavsky credits the growth with the company's ability to serve relevant ads to consumers and help advertisers see results from their campaigns

Dive Insight:

With the expansion, Amazon is prepping for significant acceleration of its advertising business and to establish a stronger corporate foothold in Boulder, a city that's quickly evolved to become a destination for technology companies. And while Boulder isn't on the closely-watched list of candidates for Amazon's second headquarters, nearby Denver is. The company has said it expects to make a final decision on HQ2 by the end of the year.

Amazon is still a relatively small player compared to the digital advertising duopoly of Facebook and Google, which control the vast share of the market. But Amazon's ad business has also grown even faster than many forecasts expected. For Q2 earnings reported in July, Amazon saw revenue of $2.2 billion in its "other" category, which mostly consists of advertising. Ad sales increased 129% year-over-year, making it the Seattle-based company's fastest growing category..

Amazon offers several advantages to marketers that competitors can't, mostly thanks to its robust e-commerce platform. More than half of online shoppers begin their product searches on Amazon, meaning that ads would typically be served to consumers after they've started their shopping journey and are ready to buy. Amazon also offers advertisers a wealth of data on customer search habits and purchasing behaviors that can inform marketing strategies.

Amazon has been working to beef up its advertising offerings over the past year, with the expanded ad hub following that trend. Amazon is reportedly beginning to work more directly with brands rather than going through ad agencies to negotiate ad deals. The company has also been testing retargeting ads in a fashion similar to Google.