In recent years, Amazon has evolved into a colossal player in online advertising, with brands investing heavily for prime visibility on the retailer’s platforms. Now, Amazon is opening the doors for other websites to leverage its advertising technology for their own marketplaces.
This new service, named Amazon Retail Ad Service, enables businesses to display “contextually relevant advertisements in the optimal locations and at the ideal times” within search results, product pages, and various sections of their sites, as announced by Amazon on Thursday.
Initially, this service is available for retailers in the U.S., who will incur fees based on their usage levels, though specific pricing details were not shared.
In 2022, Amazon started detailing its advertising income in quarterly financial reports, revealing that this sector had become a vital asset to both the company’s revenue streams. The latest quarter saw advertising revenue reach $14.3 billion, making it the third-largest player in digital advertising, behind Alphabet and Meta.
However, this figure pales in comparison to sales generated from Amazon’s online retail and cloud services, which totaled $61.4 billion and $27.4 billion, respectively, in the quarter ending October.
The majority of Amazon’s advertising income is derived from sponsored product ads, which are keyword-focused advertisements allowing brands to promote specific products. Over time, Amazon has integrated more of these sponsored listings into search results and product pages. The company also secures some advertising revenue through its streaming services.
With the Amazon Retail Ad Service, businesses will gain the ability to personalize the configuration, positioning, and quantity of ads displayed across their platforms, in addition to utilizing Amazon’s advertising measurement and analytics tools.
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