Prospects look brighter for Amazon.com (AMZN)

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With millions of consumers staying at home due to the COVID-19 pandemic, Amazon (AMZN) has become one of America’s most important businesses in 2020. Amazon’s revenue line, which mainly consists of advertisements, also grew in the first nine months of 2020, mainly due to e-commerce sales.

Statistics from eMarketer indicate that online sales in the US increased by 32.4% last year. Although e-commerce will continue to have a strong growth rate even after physical stores reopen in 2021, due to the advantages of E-commerce and derived consumer habits, it will continue to be one of the highest in 2021.

Customers and advertisers both enjoy many advantages from Amazon.com (AMZN). Based on recent studies, the Amazon Prime membership model, which includes free shipping for online orders, enables consumers to purchase items more frequently. Given the vast variety of products and competitive prices that the site offers, which has already enabled it to attract 2.5 million sellers, consumers benefit from its services as a shopping platform. Those are the reasons why over half of Americans turn to Amazon.com when looking to buy something.

Advertising companies advertise in the exact locations where they have the highest probability of making sales. Research by Cowen suggests advertisers expect their ad budgets to be spent more on Amazon ads as time goes on. Consequently, due to Amazon’s ad business, the company is in the process of taking market share from competitors such as Facebook and Google.

How is Amazon Ads different from Google and Facebook?

Outside influences less influence advertising at Amazon.com (AMZN) than at Facebook and Google. Since users will have the freedom to choose whether to allow each of the installed apps to track their data, this means Facebook will lose the ability to target their advertising and measure its effectiveness. At the end of Q3 2019, Facebook’s advertising revenue was 94% derived from mobile devices before the company stopped disclosing that data.

Likewise, Google pays Apple to have its search engine installed in devices by default. There has been a lot of controversy over this and antitrust investigations that could negatively affect Google. Moreover, Apple is developing its search engine, which might become the default search engine.

Amazon.com (AMZN) has the competitive advantage of hosting its digital advertising on its marketplace and video streaming service. Furthermore, Amazon tracks ads from impression to conversion. Amazon should see a rise in digital ad revenue as the company continues to expand its e-commerce business.

Performance Of AMZN Stock In Recent Trades

Investing in the stock market can become complex sometimes, even for seasoned investors. However, the market can sometimes move in the opposite direction even when a trader receives its expected profit. It can sometimes lead to second-guessing and doubts for some traders. This is why it is very important to understand historical price performance and both long- and short-term trends. The price of Amazon.com (AMZN) has increased by 6.11% over the past week. An evaluation of the stock’s price performance for the past three months shows it has gained 3.70%, while it has gained 9.47% over the past six months and has gained 76.94% for the last twelve months.

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