- At "AdCon 2019," Amazon promoted a business that surpassed $10 billion in annual revenue last year.
- The two-day, invite-only event included keynote speeches by top ad executives and breakout sessions to showcase Amazon’s growing line of ad products.
- Advertising is rapidly becoming a key profit engine for Amazon's overall business.
Amazon's advertising business, once a niche part of the company's sprawling empire, is now big enough to merit its own conference.
Last week in Seattle, Amazon attracted roughly 400 people to "AdCon 2019," CNBC has learned. The inaugural two-day event featured the company's most senior ad executives and sessions to educate businesses on "how to use Amazon Advertising to create connections with shoppers at key moments across the purchase journey," according to a page for the conference on events site Cvent.
Amazon's ad unit, which makes money by charging brands to promote their products across Amazon properties in a variety of ways, topped $10 billion in annual revenue last year, and eMarketer predicts that, in 2020, it will account for 10% of U.S. digital ad spending. That puts Amazon third, behind only Google and Facebook, which control a combined 60% of the market.
More than being a revenue driver, advertising is a major profit center for Amazon. While Amazon doesn't currently disclose its profitability, Piper Jaffray estimates the ad business will surpass Amazon Web Services in 2021 as the company's main profit engine.
The invite-only conference included case studies from brands like mattress company Tuft & Needle and pet food provider I and Love and You. There were recommendations for reaching new customers, techniques for using sponsored ads and breakout sessions on best practices for hardlines (electronics, appliances), softlines (clothing, linens) and consumables.
"We will share learnings and best practices that will help you plan and execute to achieve your business objectives," the site said.
Amazon is an increasingly important ad partner for brands, now that the site accounts for almost 40% of the U.S. e-commerce market. John Shea, the chief growth officer of Teikametrics, a company that helps sellers advertise on Amazon and a sponsor of the event, said one of the key focus areas was helping businesses understand how best to direct their ad spending.
Paul Kotas, senior vice president of Amazon Advertising, and Colleen Aubrey, vice president of performance advertising, took questions from attendees in a Q&A session.
"This was a coming-out party for Amazon's advertising team," Shea said.
An Amazon spokesperson declined to comment.
AdCon is still pedestrian in size relative to the company's annual re:Invent conference for Amazon Web Services. AWS launched re:Invent in 2012 and now attracts more than 40,000 people to Las Vegas.
Still, it's a significant step for the advertising business, which last year held a much smaller gathering called "Rev2018" targeted at ad agencies, not brands.
Franz Jordan, CEO of Sellics, a company that helps Amazon sellers, said AdCon was the "biggest event Amazon has ever had with real advertisers." Sellics was also a sponsor.
Jordan said that attendees were mostly small and medium-sized companies, as large brands tend to have a dedicated Amazon representative. He said the event was useful in understanding all of Amazon's different products, such as display ads, video ads, and custom ads, as well as a new product called Stores, which allows brands to design their own digital storefronts.
"Amazon's ad products have become a lot more complex than a few years ago," Franz said. "So it makes sense to bring the industry together and create a platform where everyone can meet."