Amazon Introduces New Advertising Tool ‘Amazon Retail Ad Service’ for Third-party Retailers

Amazon Ads has introduced a new service called Amazon Retail Ad Service that allows third-party retailers to use their own advertising tools in their online stores.

With Amazon Retail Ad Service, the e-commerce giant is offering a proven solution to other retailers looking to enter the lucrative market without going through the costly and complicated process of setting up ad tech. The move could upend the ecosystem of third-party vendors that are jumping on the fast-growing retail media opportunity and looking to help retailers build the infrastructure they need to succeed in an increasingly competitive field.

Amazon said Thursday that its latest offering is a new AWS-based service that will enable retailers to show “contextually relevant ads in the right place and at the right time” in search results, product pages, and other areas of their websites.

Customers can click on the ads and complete a purchase on the retailer’s online store. The goal is to improve the shopping experience and scale advertising by leveraging Amazon Ads’ 20 years of ad tech expertise.

The service is currently in beta with multiple retailers, including iHerb, Oriental Trading Company, and Weee!, and will soon launch with Tilly’s and other retailers.

Retailers decide the format of the ad creative, where the ads appear on their app or website, and how many ads to display. They also control what customers see after clicking on an ad, such as: whether traffic is redirected to a product page, a “quick view” of the product is provided, or customers can add the product directly to their shopping cart.

This allows retailers to serve ads to brands that are already using Amazon Ads, making it more streamlined to connect with advertisers. Advertisers can see which retailers are available in the Amazon Ads console or API integration. They can then create and manage campaigns for each merchant and access reports through a familiar workflow.

This centralized approach expands reach while saving time and resources. Advertisers also benefit from the security that comes from using “the same ad technology and machine learning models that drive their performance in Amazon’s store.”

Participating retailers can also offer advertising offers through the Amazon Ads console and API. “This makes it easy for Amazon advertisers to discover additional opportunities to scale their reach,” Amazon said.

It also aims to simplify the management of advertising campaigns across multiple retailers through consistent reporting, providing faster insight into campaign performance and making it easier to optimize campaigns.

“Amazon Retail Ad Service helps retailers enhance their shopping experience with highly relevant advertising that guides customers through the shopping journey, helping their shoppers with product discovery and making informed purchase decisions,” said Paula Despins, vice president of ads measurement, at Amazon. “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.”

In October 2024, Amazon Ads introduced several new advertising capabilities, including simplified product launches and measurement solutions, to help advertisers optimize their media investments.

The launch highlights how Amazon Ads is more accessible to all advertisers through its various ad products and provides actionable insights, the press release stated.

Amazon has served as a model for retailers looking to grow their ad business based on their first-party shopper data (commonly known in the industry as the Retail Media Network). With its roots in the technology and e-commerce industry, the company has had a head start in developing advanced digital marketing tools that could be a steep learning curve for traditional brick-and-mortar stores.

Amazon Retail Ad Service streamlines the process of launching and managing online campaigns through e-commerce sites. Ads delivered through Amazon Retail Ads services take into account product availability and price, as well as contextual information such as shoppers’ search queries and categories displayed on websites and apps. These tools also allow brands to manage customer behavior after interacting with an ad, sending consumers more information, or encouraging them to buy directly.

Brands using the Amazon Ads platform or Amazon API integration can see which retailers they can advertise with. It’s a centralized model designed to increase awareness and reach. iHerb’s senior vice president of global marketing Neil Folgate said in a press release that the service is “driving stronger engagement and conversions.” The executive pointed to a shared pool of 1,200 brands already active in Amazon Ads, thereby building a bridge to iHerb’s target audience.

Amazon Retail Ad Service is built on the company’s cloud computing technology, Amazon Web Services (AWS), with controls to ensure retailer data is separated from Amazon Ads and other business units. AWS Clean Rooms provides measurement capabilities that generate aggregated, anonymous reports for retailers and their advertising partners while ensuring privacy.