Amazon will expand its ad unit allowing retailers to use in-store advertising tools

Amazon has become an online to the giant In recent years, brands have paid top dollar for premium placement on retailers’ websites. Now, Amazon is allowing other sites to use its ad technology for their own stores.

The new offering, called Amazon Retail Ad Service, allows companies to display “contextually relevant ads in the right place and at the right time” in search results, product pages and other areas of their site, Amazon said Thursday.

It is initially available to US retailers, who will pay fees based on usage levels. Prices were not disclosed.

Amazon in 2022 began breaking out advertising revenue in its quarterly earnings reports, showing that the business had become a major contributor to the company’s bottom line and top line. Advertising revenue in the last quarter amounted to $14.3 billion, third after Alphabet and Goal in digital advertising.

That’s still far less than the sales Amazon generates from online stores and cloud computing, which totaled $61.4 billion and $27.4 billion, respectively, in the latest quarter. room which ended in October.

The majority of Amazon’s advertising revenue comes from sponsored product ads, which are keyword-targeted ads that allow brands to promote certain items. Amazon has filled out more of these sponsored articles in search results and product pages over time. It also generates some advertising revenue through streaming.

With Amazon Retail Ad Service, users will be able to customize the layout, placement, and number of ads displayed on their sites, as well as use Amazon’s ad measurement and reporting tools.

The service could provide Amazon with valuable data that it can use to bolster its ad prediction and recommendation technology. The company said its first customers include health and wellness retailer iHerb, and Asian grocery startup Weee! and Oriental Trading Co., which sells toys, party supplies and crafts.

“We’ve designed this to be a win-win for retailers, advertisers, and shoppers, and we look forward to seeing it improve results, drive sales, and improve the shopping experience,” Paula Despins, vice president of Amazon Ads Measurement, said in the statement. of press.

The announcement comes a few days before the National Retail Federation meeting. annual trade fair.

It is not the first time that Amazon sells its internal technology and services to third parties.

Amazon Web Services started as cloud infrastructure to support your online retail business. The company launched AWS as a business in 2006. In 2022, the company launched Buy with Primewhich combines Amazon’s payment and fulfillment services for other retailers.