Amazon's Q1 earnings report revealed a 19% increase in advertising revenue, totaling $13.92 billion, which surpassed expectations. Despite encountering uneven results in other sectors like cloud computing, advertising remains a crucial profit driver. CEO Andy Jassy emphasized the broad reach of Amazon's ad-supported offerings in the U.S., serving over 275 million consumers. However, the upcoming upfronts come amidst uncertainty due to tariffs, which could impact advertising spending. Analysts note the conundrum facing Amazon as an e-commerce and ad platform provider, where tariff-related costs could hinder profitability for sellers and subsequently affect marketing budgets.
If Amazon's Seller costs rise due to tariffs, those sellers will likely need to increase prices which many already have done. That provides less margin for advertising expenditures.
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