CES 2025: Amazon Unveils Ad-Tech Service for Online Retailers
Amazon Ads made a major announcement at CES in Las Vegas on Jan. 9. The e-commerce giant unveiled Amazon Retail Ad Service, a cloud-based ad-tech solution that brings Amazon’s advertising technology to other online retailers.
The technology solution, which is built on Amazon Web Services (AWS), enables retailers to display contextually relevant and timely sponsored products ads across their website and mobile app and launch or bolster their own advertising business.
Amazon Retail Ad Service enables online retailers to show product ads on their own search, browse and product pages. Ads incorporate availability and price, in addition to contextual information, such as shopper search query, category or product being viewed to ensure customers see ads for desired and available products. Retailers will determine ad creative formats, where ads appear across their apps and websites, and how many ads are shown. They’ll also be able to determine what customers see after clicking on an ad, such as directing traffic to the product page, providing a “quick view” of the product or enabling the customer to add the product directly to their cart.
Amazon is billing the service as a simplified way for retailers to enhance their digital properties and connect shoppers with relevant brands using Amazon Ads' two decades of ad-tech expertise rather than launching their own retail media network (RMN).
With more retailers developing their own retail media solutions, advertisers are tasked with understanding each network’s measurement standards, capabilities and definitions. Even with the momentous push toward standardization (e.g., IAB’s guidelines), it’s unlikely industry-wide guidelines will be realized at scale soon.
Retailers that leverage the service can choose to make their advertising offerings available via the Amazon Ads console and APIs, making it easy for brands already using Amazon Ads (more than 1,200 active brands) to discover additional opportunities, according to a news release. From there, advertisers can create and manage their campaigns across multiple retailers and access consistent reporting through existing workflows they’re familiar with.
"We’ve designed this to be a win for retailers, advertisers and shoppers, and we look forward to seeing how it improves outcomes, drives sales and enhances the shopping experience,” Paula Despins, vice president of ads measurement, said in the release.
What is Amazon Web Services?
AWS provides cloud computing platforms to subscribers (776k as of November 2024) via remote servers, and is a distinct revenue segment for Amazon. Its services range from computing, storage, networking, database, analytics, deployment, application services, management, mobile, blockchain, developer tools and tools for Internet of Things.
Being built on AWS, which was designed as a secure cloud environment, allows retailers to manage their data in their AWS account. This means retailers will have the same level of access and security benefits that all AWS customers are provided. The service uses machine learning models that process contextual information like search queries and product attributes to serve relevant ads.
The offering is currently in beta in the U.S. with multiple retailers, iHerb, Oriental Trading Company and Weee!, and launching with Tilly's and more retailers soon. While it will be available to retailers of all sizes, it could be unlikely that larger retailers would tap into one of their biggest competitors’ ad business.
“With this move by Amazon, the industry is being forced to quickly react and push back on the marketplace giant as this is, in our view, an attempt by Amazon to monopolize the retail media ecosystem and it poses a real threat to other retailers,” Regina Ye, CEO and co-founder of Topsort, told P2PI. “You could even say the industry saw this move coming, as we've seen big retailers already moving away from AWS recently.”
“The battle for who comes out on top in the retail media space has been accelerated greatly,” Ye added. “We see this as a fork in the road moment for retailers who want to own their own destiny. Now really is the time for these retailers to arm themselves with the best retail media technology to not be solely reliant on big tech.”
Not everyone agrees, though. Drew Habeck, SVP of media at Flywheel, said in Amazon’s news release that he is “thrilled” about the potential of this service for Flywheel and its clients.
"Amazon's Retail Ad Service has the potential to be transformative for advertisers,” he said. “It leverages high-performance advertising technology to simplify campaign management with access through a single service provider: Amazon Ads."
While perhaps a controversial move by one of the industry’s most dominant forces, Amazon is selling the service by promoting the following benefits:
- The centralized approach saves time and resources while expanding reach.
- Brands can manage and analyze ad campaigns across multiple retailers, enabling faster understanding of campaign performance and easier optimization.
- It helps online retailers deliver more personalized ads that support product discovery and informed purchase decisions.
- Advertisers benefit from the reassurance that comes with using the same ad technology and machine learning models that drives their performance in Amazon’s store.
- It operates on dedicated systems with “stringent” access controls to ensure retailer information is separate from Amazon Ads and other Amazon businesses.
- Ad measurement takes place within AWS Clean Rooms, enabling “privacy-enhancing collaboration” to generate aggregated, anonymized reports for the retailer and its advertisers.