Amazon’s new ad tech tool powers third-party retailers’ ad businesses

Amazon has launched a retail media service for retailers to run ads on their e-commerce websites. Amazon Retail Ad Service, which the retail and ad tech giant announced on Thursday, basically gives third-party e-commerce sites a way to mimic Amazon’s ad experience by showing product ads from brands that sell through their stores and apps. The new retail media play was developed through Amazon Ads and built on Amazon Web Services, the cloud offering. The new platform gives advertisers “the same ad technology and machine learning models that drives their performance in Amazon’s store,” Amazon said. Partners testing the service include party supplier Oriental Trading Co., supplement seller iHerb and Asian supermarket Weee!, and retailers including Tillys are also set to join, Amazon shared. Ad Age Tech Power List 2025 We’re looking for top digital innovators from agencies, brands, platforms, ad tech companies and tech startups Enter here The retailers can make the inventory available through Amazon Ads, which is the same console advertisers use to manage campaigns across Amazon. There also are options for retailers to build an ad interface outside of Amazon Ads by creating a private label console through Amazon’s API—or application programming interface. IHerb, for example, offers more than 1,200 brands for sale that already buy ads through Amazon Ads, Neil Folgate, senior VP of global marketing at iHerb, said in the announcement. Now, those advertisers will have a “frictionless” way to connect with iHerb’s “highly motivated audience,” Folgate said. “We generate revenue through a combination of sharing a portion of the ad revenue and charging for the technology infrastructure used [by advertisers],” Amazon said about the new deals with retailers. “This model ensures that our interests are aligned with the retailer's success and growth in their advertising business.” Amazon has become a formidable force in retail media, developing ad tech that delivers ads to its e-commerce site, third-party websites and connected TVs. This offering is another step toward proliferating advertising across the web. However, unlike traditional publishers that typically run display ads, this is for retailers to stand up ad businesses that are similar to Amazon’s experience. Other retailers have been getting into the commerce media game, too, as ad businesses have proved to be a lucrative source of revenue. Walmart, Target, Walgreens, CVS, Best Buy and others have ad offerings. And Amazon’s retail ad service could bring more e-commerce sites into the ads business. Amazon also announced other updates to its ad platform throughout the week at CES. On Tuesday, it announced that advertisers would have more robust sales history data, going back five years instead of 13 months, enabling them to perform more effective measurement studies on campaigns. That “extended lookback” window was part of a change to Amazon Marketing Cloud. The longer time horizon means brands can analyze more historical sales data from Amazon’s store to get a clearer picture of the customers they target with ads. Amazon also released a generative AI tool—an SQL generator in Amazon Marketing Cloud—that writes code, which marketers use to develop custom audiences, or segments of consumers, for their ad campaigns. Amazon’s announcement said that marketers type in a desired audience, say: “customers who have heard our audio ads, but have not yet made a purchase.” Then the SQL generator whips up the code that would be used to identify that exact audience and deliver the ads to them. Writing that code manually would otherwise be painstaking work, according to Amazon.

Amazon’s new ad tech tool powers third-party retailers’ ad businesses

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