Amazon is expanding its advertising reach by offering its ad technology to other retailers. The new Amazon Retail Ad Service allows retailers to use Amazon’s tools to sell product ads on their own ecommerce sites. This move positions Amazon to compete directly with firms like Criteo, Publicis Groupe-owned Epsilon, and startups such as Koddi in the retail media space.
Amazon Retail Ad Service is built on Amazon Web Services and enables ads to appear on retailers’ search, browsing, and product pages. The service is currently in beta, with participants including Oriental Trading Company, iHerb, and Weee!. Neil Folgate, SVP of global marketing at iHerb, stated, “This innovative solution and proven technology allow us to deliver more relevant and personalized ads to our shoppers, enhancing their experience while driving stronger engagement and conversions.”
Amazon is giving retailers control over which parts of their ad businesses use Amazon’s technology.
Retailers can access Amazon’s ad console to manage campaigns, and advertisers can opt to run ads across multiple retailers’ properties. This flexibility is designed to appeal to advertisers and enhance the overall retail media ecosystem. The technology uses contextual information, such as search queries, to display relevant ads.
It also includes options for customizing ads based on product availability and price.
Amazon expands retail media services
Retailers can manage their data independently within AWS accounts to ensure data privacy and security.
Amazon’s advertising business continues to grow, with $14.3 billion in ad revenue in Q3 2024, marking a 19% year-over-year increase. By offering its ad technology to other retailers, Amazon aims to expand its dominance in the advertising market and provide brands with unmatched access to its ecosystem of first-party data. However, this expansion raises critical questions about data privacy, transparency, and consumer consent.
As Amazon’s ad service grows, it highlights the need to reexamine how consent is obtained, understood, and respected in retail media. Most consumers may not fully understand the extent to which their data is being used to power advertising algorithms. Consent is often buried in complex legal terms, and few have the time or expertise to fully comprehend what they are agreeing to.
Amazon’s ability to navigate these challenges effectively could determine whether its Retail Ad Service fosters trust or provokes consumer pushback. The company must ensure that sensitive data is used responsibly and that consumers have greater awareness and control over their data. As governments worldwide continue to crack down on opaque data practices, Amazon faces a pivotal moment.
It must not only adhere to legal standards but also set a higher standard for transparency and accountability in the industry.
