BARCELONA, SPAIN – MARCH 2: Logo of Amazon Advertising, the advertising solutions service formerly known as AMD or Amazon Marketing Services, at Mobile World Congress 2023 on March 2, 2023 in Barcelona, Spain . (Photo by Joan Cros/NurPhoto, Getty Images)
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Amazon has grown into an online advertising juggernaut in recent years, with brands paying big bucks for premium placement on retailer websites. Currently, Amazon lets other sites use its advertising technology in their stores.
The new service, called Amazon Retail Ad Service, will allow businesses to display “contextually relevant ads in the right place and at the right time” in search results, product pages, and other areas of the site. Amazon announced Thursday.
It will initially be available to U.S. retailers, who will pay based on usage levels. Prices have not been disclosed.
In 2022, Amazon began disclosing advertising revenue in its quarterly earnings report, showing that the business is a significant contributor to the company’s revenue and revenue. Ad revenue in the latest quarter was $14.3 billion, ranking third. alphabet and Meta In digital advertising.
That’s far less than the revenue Amazon generated from its online store and cloud computing, which totaled $61.4 billion and $27.4 billion, respectively, in the quarter ending October.
The majority of Amazon’s advertising revenue comes from sponsored product ads, which are keyword-targeted ads that allow brands to promote specific products. Over time, Amazon has crammed more and more of these sponsored products into its search results and product pages. You can also earn advertising revenue through streaming.
Amazon Retail Ad Service allows users to customize the design, placement, and number of ads displayed across the site, as well as use Amazon’s ad measurement and reporting tools.
Amazon said the service is run on a separate system from its retail operations, with retailers managing data through their AWS accounts.
This service could provide Amazon with valuable data that can be used to power its ad prediction and recommendation technology. The company said early customers include health and wellness retailer iHerb and Asian grocery startup Weee!. Oriental Trading Company sells toys, party supplies, and handicraft supplies.
“We designed this to be a win-win for retailers, advertisers, and shoppers,” said Paula Despin, vice president of Amazon advertising measurement. I’m looking forward to seeing how he improves.” press release.
The announcement came days before the National Retail Federation’s annual trade show.
This isn’t the first time Amazon has sold its technology or services to a third party.
Amazon Web Services began as a cloud infrastructure to support online retail businesses. The company launched AWS as a business in 2006. In 2022, we launched Buy With Prime, which combines Amazon’s payment services with fulfillment services for other retailers.
