Amazon ads are everywhere. It’s only the beginning. –

Amazon ads are everywhere. It’s only the beginning. –

Type any random product into Amazon’s search bar and look closely at the results. If you don’t scroll, every listing in front of you will most likely be an ad, signaled by a small label with the word “Sponsored.”

And it’s just the beginning.

While company founder Jeff Bezos once said that “advertising is the price you pay for having an unremarkable product or service,” Amazon has in recent years become an ad-selling machine, driven by the substantial profit margins and the rising value of digital retail estate on the most popular shopping site in the West. As a result, Amazon’s ad business grew 58 percent in 2021 to more than $31 billion in revenue, making it the third-biggest online ad seller in the US, only trailing Google and Facebook. In the first nine months of 2022, Amazon’s ad revenue surpassed the money the company makes from Prime, Prime Video, and its other audio and e-book subscriptions combined. Along with Amazon Web Services, advertising has emerged as one of the company’s top two profit engines.

Amazon’s ad revenue surpassed the money it makes from Prime, Prime Video, and its other audio and e-book subscriptions combined

Advertising is now a crucial part of Amazon, and the company has ambitious plans for the future — highlighted by a flashy New York City event for advertisers in October, capped off by a private concert by the Killers, that industry executives said was a reflection of the company’s growing ambition in the sector. Amazon has designs to boost its ad business to new heights by selling more video commercials on Amazon properties like the video game livestreaming service Twitch and during live sporting events streamed on Prime Video; and by offering audio ads on Amazon Music. The company has also invested heavily in in-house software tools that allow brands to purchase highly targeted ads around the web.

With this transformation, Amazon has become a power player in yet another industry, adding advertising to a list that already includes e-commerce, logistics, entertainment, cloud computing, and voice assistants. But as in the other sectors it’s upended, Amazon’s rise in advertising will unleash complex ripple effects on millions of people, from small business merchants trying to make a living from selling on Amazon, to people whose experiences buying stuff online will continue to be altered — on Amazon and its competitors, from Walmart to Home Depot, who are following Amazon’s lead and adding more ads. Some of those changes may be good for those impacted; others might not be so lucky.

“Amazon is always inventing to ensure that our advertising products help customers discover selection they love and help sellers cost-effectively succeed in our store,” Amazon spokesperson Patrick Graham said in a statement. “Customers have many choices for where to shop, and businesses have many choices for where to sell, and we are excited by the positive response from both customers and advertisers to the value our optional advertising services provide them.”

A short history of ads on Amazon

“Everything’s an ad,” said Adam Epstein, co-president of Perpetua, an advertising technology firm that purchases more …….


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