07/29/2021 | Press release | Distributed by Public on 07/29/2021 16:42
Amazon published their Q2 earnings reporttoday. The report was the first from Andy Jassy, who replaced Jeff Bezos as CEO of Amazon on July 5, 2021. This earnings report showed more humble growth compared to most recent quarters, with net income decreasing by $300 million from Q1 2021. Nevertheless, Amazon boasted positive performance across the board, year-over-year (YoY).
Q2 2020 marked massive growth in ecommerce sales as more shoppers than ever flocked to Amazon during stay-at-home orders. This growth presented a rather difficult challenge for Q2 2021 to continue boasting strong year-over-year growth (which also isn't ideal for a new CEO's first quarterly earnings report).
Though Amazon spokespersons denied it, it seems likely that this was a key factor in Amazon's decision to move Prime Day 2021 into the second quarter. And it worked.
According to the earnings report, Prime Day 2021 was 'the biggest two-day period ever for small and medium-sized businesses in Amazon's stores worldwide.' Additionally, Prime Day 2021 was the biggest Prime Day ever, with Prime Members from 20 countries buying over 250 million items during the event.
Prime Day 2021's success undoubtedly boosted performance metrics for Q2, contributing to the 27% growth in net sales YoY.
There's plenty to process in the quarterly earnings report, but the most interesting takeaway in this writer's opinion is the continued growth of Amazon advertising revenue, and what that indicates for brands selling on the platform.
Amazon made clear that Amazon advertising remains a keen focus for the future, stating that Amazon Advertising added over 40 new features and self-service capabilities. Amazon also announced in Q2 that ads were being made available for Amazon Streaming TV and Twitch.tv, which together reach 120 million viewers per month in the U.S.
It's also notable that the 'Other' segment, which consists mostly of Amazon advertising revenue, grew more than it did the previous quarter, making it one of the few performance metrics to do so. This growth can be attributed to the fact that many Amazon sellers reduced their advertising budgets in Q2 2020 as the coronavirus created economic uncertainty.
With more sellers advertising and sellers increasing their ad budget, brands must learn how to overcome rising ad costs without sacrificing performance.
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