Prime Highlights:
Amazon introduces its new Retail Ad Service, allowing third-party retailers to use its ad tools on their own websites.
The service provides customized ad placement and targeting options for retailers, along with access to Amazon’s ad measurement tools.
Key Background:
Amazon has further cemented its role as a powerhouse in digital advertising by expanding its advertising offerings to third-party retailers. The new service, Amazon Retail Ad Service, enables other businesses to leverage Amazon’s advanced advertising technology to run targeted ad campaigns across their own websites. This marks a significant step in Amazon’s strategy to extend its highly successful advertising solutions beyond its own retail platform.
The Retail Ad Service allows retailers to display contextually relevant advertisements on their websites, including in search results and product pages. Retailers will have full control over customizing the design, placement, and frequency of ads, while benefiting from Amazon’s powerful ad measurement and reporting tools to track and optimize their campaigns.
Initially available to U.S.-based retailers, the service operates on a usage-based pricing model, though exact fees have not been disclosed. This development is expected to further boost Amazon’s already growing advertising revenue, which surpassed $14.3 billion in its most recent earnings report. As of 2025, Amazon ranks third in the U.S. digital ad market, behind Alphabet and Meta.
Retailers participating in the program can tap into Amazon’s extensive ad tech infrastructure, enabling them to create more personalized and targeted shopping experiences. Early customers of the service include health and wellness retailer iHerb.
Amazon’s ad revenue primarily stems from sponsored product advertisements, which allow brands to promote items through keyword targeting. Over time, Amazon has increased the prominence of these ads within search results and product pages, optimizing them for better visibility and consumer engagement. The introduction of the Retail Ad Service comes ahead of the National Retail Federation’s annual trade show, and positions Amazon as a growing force in the broader advertising industry. As Amazon continues to expand its offerings, the service is expected to provide valuable data that will enhance its ad prediction and recommendation capabilities, solidifying its competitive edge in the sector.
