BARCELONA, SPAIN – MARCH 02: The logo of Amazon ads, the advertising solutions services formerly known as AMD or Amazon Marketing Services, during Mobile World Congress 2023 on March 02, 2023 in Barcelona, Spain. (Photo by Joan Cros/NurPhoto via Getty Images)
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Amazon turned into online ad juggernaut in recent years, with brands paying big bucks for prime placements on retailer sites. Now Amazon is allowing other sites to use its ad technology for their own stores.
The new offering, called Amazon Retail Ad Service, allows businesses to display “contextually relevant ads in the right place and at the right time” in search results, on product pages and other areas of their sites, Amazon announced Thursday.
It is initially available to US merchants, who will pay fees based on usage levels. Prices have not been announced.
Amazon in 2022 began showing ad revenue in its quarterly earnings reports, showing that the business had become a significant contributor to the company’s top and bottom lines. Ad revenue in the most recent quarter was $14.3 billion, ranking third Alphabet and Target in digital advertising.
That’s still far short of Amazon’s sales from online stores and cloud computing, which were $61.4 billion and $27.4 billion, respectively. fourth which ended in October.
Most of Amazon’s ad revenue comes from sponsored product ads, which are keyword-targeted ads that allow brands to promote specific items. Amazon has uploaded more of these sponsored items into search results and product pages over time. It also generates some ad revenue through streaming.
With the Amazon Retail Ad Service, customers will be able to customize the design, placement and number of ads displayed on their pages, as well as use Amazon’s ad measurement and reporting tools.
The service could provide Amazon with valuable data that it can use to strengthen its ad prediction and recommendation technology. The company said early customers include health and wellness retailer iHerb, Asian grocery startup Weee! and Oriental Trading Co., which sells toys, party supplies and crafts.
“We designed this to be a win-win for merchants, advertisers and customers, and we look forward to seeing how it improves results, drives sales and enhances the shopping experience,” said Paula Despins, vice president of Amazon Ads Measurement, in a press release.
The announcement comes days before the National Retail Federation annual fair.
This is not the first time that Amazon has sold its internal technology and services to third parties.
Amazon Web Services began as cloud infrastructure to support its online retail business. The company started AWS as a business in 2006. In 2022, the company launched by Buy With Primewhich combines Amazon’s payment and delivery services for other merchants.
