Amazon ad machine’s remorseless 23% YOY increase
Amazon increased its advertising-services revenue by 23% year-on-year in the past quarter, to about A$24 billion, continuing momentum that has seen its relatively low-profile ad business eclipse traditional media.
Overnight the e-commerce giant released its Q2 2025 accounts, which showed a net-sales increase of 13% fuelling a profit of about A$28 billion for the quarter. This was a 35% increase on the same period last year.
The spike in Q4 2024 is seasonal
Amazon, like the other digital giants reporting this quarter, was keen to attribute the strong performance to AI.
“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency and business growth,” CEO Andrew Jassy said.
“Our conviction that AI will change every customer experience is starting to play out as we’ve expanded Alexa+ to millions of customers, continue to see our shopping agent used by many millions of customers, [and] launched AI models like DeepFleet that optimise productivity paths for our 1 million+ robots.”
In terms of the advertising business, the quarterly pattern for Amazon is to build to Q4 (October–December), when it does a great deal of business on the back of Black Friday/Cyber Monday (in November) and holiday shopping. This year’s Q2 numbers sit above Q3 last year and slightly below the high point of Q4 2024.
Answering investor questions after the earnings presentation, Jassy noted that Amazon’s Alexa+ assistant may include ads in future. In the past, Amazon executives have highlighted the important contribution its advertising-services business makes to profitability.
Amazon’s ad business— which, as noted above, generated about A$24 billion in revenue this quarter and A$90-$100 billion on an annualised basis— is three times the size of Australia’s total advertising spend across all formats.
Various consultancies estimate that total annual ad revenue in Australia sits between A$30 billion and A$40 billion.
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