Tuesday, April 4, 2017

Amazon's Advertising Clout Growing

Amazon's advertising business is growing fast enough that it threatens the dominance of Google and Facebook, according to BMO Capital Markets.

The company's ad business is "gaining significant momentum" and will take market share from Google, Facebook, and others, BMO's Daniel Salmon said in a note out Tuesday morning. Salmon upped his price target on Amazon to $1,200 from $900. Amazon closed Monday at $891.51.

According to CNBC, the advertising segment of e-commerce giant Amazon's business model has the potential to grow sales by 65 percent in 2017, reaching $3.5 billion, Salmon added. "A key point of differentiation for Amazon [from competitors] is the massive amount of consumer purchase data it possesses."

"While Google knows what people are searching for and Facebook knows what people are interested in and who they are connected to, Amazon knows the specific products that customers are purchasing and how frequently they are purchasing these products."

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