Amazon shook up the advertising world by launching its Retail Ad Service at the 2025 Consumer Electronics Show in Las Vegas. This new initiative allows retailers to use Amazon’s powerful advertising technology on their own websites and apps. It brings the company’s two decades of expertise in ad tech to a much broader audience.
But what does Amazon’s Retail Ad Service mean for retailers, brands, and shoppers? In this article, we’ll break down everything you need to know. We’ll discuss key features, how it works, its wide-reaching benefits, its limitations, how it compares to other retail media technology, and how it has the potential to transform the way brands approach digital advertising and connect with their audiences.
What is Retail Media?
Retail media is the advertising space retailers create within their own platforms, like websites, apps, or even physical stores. It’s a way for brands to connect with shoppers right at the point of purchase by delivering ads that match the context of their shopping journey.
For example, a grocery retailer might display an ad for a new snack brand on its website’s checkout page, targeting customers who are already shopping for similar items.
The growth of retail media is fueled by the shift to online shopping, where many shoppers start their purchase journey directly on retailer platforms. By using first-party data (information retailers collect directly from their customers), brands can run highly relevant and effective ad campaigns. This makes retail media a valuable tool for both brands and retailers.
What is Amazon’s Retail Ad Service?
Amazon’s Retail Ad Service is a new ad tech solution for third-party US-based multi-brand retailers to monetize their website and app traffic to help increase product sales and ad revenue. The service is built on AWS, enabling retailers to enhance their shopping experiences and scale advertising using Amazon Ads’ proven ad-technology.
Think of it as a tool that lets retailers use Amazon’s cutting-edge ad technology to improve their own websites and apps. With this service, retailers can show ads that make sense for their customers, enhancing the shopping experience while bringing in extra revenue.
The idea is straightforward: Amazon is opening its advertising playbook to retailers of all sizes. By using machine learning models (the same ones Amazon relies on), retailers can create personalized, dynamic ads tailored to their shoppers. These aren’t random pop-ups or distractions. They are ads that feel like a natural part of the shopping journey.
How Does the Retail Ad Service Work?
At its core, Amazon’s Retail Ad Service uses advanced algorithms and machine learning to deliver ads that align with the interests and behaviors of shoppers. Here’s how it works:
- Ad Placement: Retailers can display ads across various parts of their website, including search results, category pages, and product detail pages. The ads are seamlessly integrated, maintaining the site’s branding and user experience.
- Customization: Retailers have full control over how ads are displayed. They can select formats, adjust placement, and even manage the volume of ads to ensure a balance between monetization and user experience.
- Post-Click Experience: Retailers can decide what happens after a shopper clicks an ad. Options include directing users to a product page, enabling direct add-to-cart functionality, or even linking to external promotions.
The result is a highly personalized shopping experience that benefits everyone involved—shoppers, retailers, and the brands placing the ads.
Understanding the Two Customer Groups in Amazon’s Retail Ad Service
Amazon’s Retail Ad Service operates as a two-sided marketplace, catering to two distinct customer groups: retailers and advertisers.
Retailers
Retailers are the businesses that host ads on their websites and apps. By using Amazon’s advertising technology, they can turn their website traffic into revenue, improve the shopping experience for their customers, and boost their overall earnings. Plus, retailers get to decide exactly where ads appear, how they look, and how they fit into their site’s design, so everything stays aligned with their brand.
Amazon provides all the behind-the-scenes ad technology, so retailers don’t have to build anything complicated themselves. This makes it easier for small and mid-sized businesses to compete with bigger players in the retail media world.
Advertisers (Brands)
Advertisers are the brands that run ad campaigns, like Sponsored Products or Sponsored Display, and want to reach shoppers beyond Amazon’s marketplace. This service allows them to show their ads on participating retailer websites and connect with shoppers in different contexts. When someone clicks on an ad, they’re taken straight to the retailer’s website to make a purchase, keeping the shopping experience smooth and easy.
For advertisers, this is a great way to reach more customers, increase product visibility, and drive sales. Everything can be managed through the Amazon Ads Console, making it simple and efficient to run campaigns.
This setup benefits everyone—retailers, advertisers, and shoppers—by creating a system where everyone gets something valuable.
The Benefits of Amazon’s Retail Ad Service
Amazon’s Retail Ad Service brings benefits for everyone—retailers, brands, and shoppers alike.
For retailers, it’s a great way to turn website traffic into revenue without the hassle of building complex ad systems from scratch. By using Amazon’s technology, even smaller businesses can compete with bigger players in the advertising game. Retailers also get full control over where ads appear, how they look, and how many to display. This helps ensure everything fits perfectly with their brand and enhances the shopping experience.
For brands, the service offers a chance to connect with shoppers beyond Amazon’s marketplace. By running ads on multiple retailer websites, brands can reach more people at key moments in their buying journey. Amazon’s easy-to-use platform streamlines campaign management, helping brands maximize their advertising impact and stand out in a crowded digital space.
Shoppers also benefit. Instead of seeing random, irrelevant ads, they get personalized promotions and product recommendations that match their interests and shopping habits. This creates a more enjoyable, less intrusive shopping experience and makes it easier to discover and buy the products they’re looking for.
How Amazon’s Retail Media Technology Stands Out
Amazon’s Retail Ad Service isn’t just another advertising tool. It’s built on decades of experience and access to unparalleled shopping data. Here’s what makes it truly unique:
- Advanced Machine Learning: Amazon’s models analyze trillions of shopping signals to deliver highly relevant and effective ads. This level of precision helps shoppers discover products they’re genuinely interested in, boosting engagement.
- Seamless Integration: Ads delivered through this service are designed to blend naturally with a retailer’s existing site design, providing a consistent and professional user experience.
- Scalability: Whether it’s a small business or a large retailer, Amazon’s technology is flexible enough to meet varying needs. Retailers can start small and scale their ad efforts as they grow.
When compared to other retail media platforms, Amazon’s edge lies in its unparalleled data and advanced technology. While competitors like Walmart Connect and Target’s Roundel also offer retail media services, they don’t have the same depth of shopping data or two decades of ad tech expertise. Amazon’s algorithms are fine-tuned to predict shopping behaviors, making their ad placements more accurate and effective.
Amazon’s service also offers centralized campaign management across multiple retailer websites, something that is not as streamlined in other platforms. This allows brands to save time while maximizing their reach. For retailers, the ability to leverage Amazon’s expertise without building their own ad infrastructure is a significant advantage that many competitors simply can’t match.
Ultimately, the combination of cutting-edge technology and Amazon’s extensive retail experience makes this ad service a standout option for retailers and brands alike.
The Growth Potential of Amazon’s Retail Ad Service
While Amazon’s Retail Ad Service offers exciting opportunities, its current effectiveness for brands depends on the alignment between participating retailers and the types of products being advertised. Right now, only a limited number of retailers have signed up, which means some brands might not immediately find a perfect match for their campaigns.
For brands running Amazon Ads, this service will become increasingly powerful as more retailers join the platform. Here a are few ways:
- Diverse Retailer Ecosystem: A wider variety of retailers will ensure better alignment with different product categories, making ads more relevant to the shoppers seeing them.
- Increased Reach: Brands will have more opportunities to reach shoppers across a broader range of retailer sites.
- Improved Targeting: The expansion of participating retailers will enhance Amazon’s machine learning capabilities, leading to more precise targeting and better ad performance.
While some brands may not see an immediate opportunity due to limited retailer participation, early adopters can benefit from testing the service, gaining insights, and positioning themselves for success as the platform scales.
Over time, as more retailers recognize the value of Amazon’s Retail Ad Service and join the network, this platform will likely evolve into an indispensable tool for brands across all industries. The true potential lies in its ability to create a seamless ecosystem where brands, retailers, and shoppers all thrive.
Implications for the Retail Industry
Amazon’s Retail Ad Service represents a major shift in the retail media landscape. By making advanced ad technology more accessible, Amazon is attempting to level the playing field and allowing retailers of all sizes to compete more effectively.
For the broader industry, this service signals a move toward greater integration between e-commerce and advertising. As more retailers adopt Amazon’s technology, we can expect to see several key trends emerge:
- Increased Revenue Opportunities: Retailers can diversify their income streams by leveraging advertising revenue, which can be particularly impactful during periods of lower product sales.
- Expansion of Retail Media Networks: With Amazon’s service as a model, we’re likely to see more retailers developing their own ad networks, further expanding the retail media ecosystem.
- Enhanced Competition: Smaller retailers now have access to tools that allow them to compete more effectively with larger players. This democratization of technology can lead to a more balanced retail marketplace.
- Stronger Brand Partnerships: Brands are likely to invest more in retail media campaigns as they see improved performance and ROI from ads placed through Amazon’s platform and similar services.
- Evolution of Shopper Expectations: Shoppers will begin to expect more personalized and seamless ad experiences, pushing retailers to continuously optimize their advertising strategies.
For retailers and brands, the Retail Ad Service isn’t just an opportunity to improve revenue or visibility. It’s a chance to reshape how they engage with their audiences in a digital-first world. As the retail industry continues to evolve, embracing tools like Amazon’s Retail Ad Service will be essential for staying competitive and meeting customer expectations.
Using Sponsored Products as Retail Media
Amazon’s Sponsored Products Across Retailers is a new feature that allows brands to promote their products directly on the websites and apps of participating retailers.
While the current number of participating retailers is limited, the potential for this feature to become a powerful ad solution grows as more retailers join the program. Brands will increasingly find alignment between their products and the platforms hosting these ads, leading to better-targeted campaigns and enhanced results.
Brands can set up campaigns through the Ads Console, Bulksheets, or the Ads API. To identify participating retailers and set up campaigns, visit the Amazon Ads Console and look for ‘Advertise products across retailers’ under the Sponsored Products tile.
Brands then choose the products and retailers they want to feature during campaign setup. Ads for these products will appear on retailer sites, such as search results, product detail pages, or category pages. The shopper’s journey is smooth—when they click on an ad, they’re taken directly to the retailer’s site to complete their purchase. This means products don’t need to be sold on Amazon to benefit from the service.
How to Launch Your First Campaign:
- Visit https://advertising.amazon.com/cb and look for ‘Advertise products across retailers’‘
- Look for the sponsored products across retailers tile. In the drop down, select a retailer where you sell products and where you want your ads to appear.
- Within Campaign Builder, add the products that you want to advertise, which are products from the retailer’s catalog. Define your targeting, keywords, and bidding strategies. Choose your settings: Give your campaign a name, define your start and end dates, and input your daily budget.
- Click Launch; advertisers will see a summary page and can find their campaign on the Campaign Manager page, and can pull Sponsored Products reporting to see performance.
Channel Key Takeaway
Amazon’s Retail Ad Service is poised to transform the way retailers and brands approach digital advertising. By combining Amazon’s unparalleled ad technology with the unique needs of individual retailers, this service will create a powerful ecosystem that benefits everyone involved.
If you’re ready to take the next step, Channel Key is here to help your brand set up, optimize, and thrive with Amazon’s Retail Ad Service. Don’t wait to start transforming your digital presence. Contact us today to discover how Channel Key can help your brand succeed in this rapidly evolving retail media landscape.
For more information on maximizing your ad strategies, check out our comprehensive guide on Amazon Advertising Services.
