Amazon and Facebook are both significant players in the digital advertising space. However, Facebook has faced increasing scrutiny and regulation over its handling of user data, which has led to some limitations on ad targeting.
In 2020, Facebook announced that it would limit the amount of data that advertisers could use for targeting ads related to housing, employment, and credit. Additionally, Apple’s iOS 14 update, which was released in April 2021, made it more difficult for Facebook and other companies to track user behavior and target ads.
Amazon’s investment in ad targeting
Amazon, on the other hand, has been investing heavily in its advertising products in recent years. The company’s advertising business has snowballed and is now a significant player in the digital advertising space.
Amazon offers a range of advertising products and tools, including sponsored product listings, display ads, video ads, and custom ads. The company has also expanded its programmatic advertising capabilities, allowing advertisers to use automated bidding and targeting to reach specific audiences.
In addition, Amazon has been integrating its advertising products more closely with its e-commerce platform, providing advertisers with a variety of targeting options based on shopping behavior and purchase history. This has given advertisers new opportunities to reach consumers at different stages of the purchasing journey, from product discovery to checkout.
Amazon vs Facebook’s performance in advertising
Overall, Amazon’s investments in its advertising products have made it a formidable player in the digital advertising space.
In the fourth quarter, Amazon’s ad division, which has quickly risen to third place among digital ad providers, climbed by 19%, while Facebook’s parent company, Meta, announced its third consecutive decline in revenue.
iOS update impact on advertising
The 2021 iOS update, made it mandatory for app developers to ask users if they want to be tracked. The pool of possible clients has, therefore, since been thinned out. That has made it harder for businesses to accurately target people as more users opt not to utilize app tracking.
To discover the same number of consumers as before, Facebook has to deliver to a broader pool of people. That’s more costly for most businesses.
The iOS update from Apple has had less of an impact on Google. But the slowdown in the economy is still hurting the ad industry. Alphabet, Google’s parent firm, reported a 1% increase in revenue to $76 billion.
Even while gaining market share from Google and Facebook, Amazon is still far behind the two industry giants. The two hold 28.8% and 20.5% of the sector, respectively.
