Amazon’s new retail advertising service makes retail media networks available to everyone. The service allows retailers to use Amazon’s powerful advertising technology to sell ads on their websites.
This is a significant milestone for the e-commerce and advertising giant which was primarily focused on selling ads within its ecosystem. The company now competes directly with retail leaders like Criteo, Epsilon and Koddi.
How it works
Integrating Amazon technology into their websites will allow retailers:
Sell ads to Amazon’s vast pool of advertisers. Use Amazon machine learning to deliver highly targeted and personalized ads to shoppers. Control ad placement and formats, ensuring that ads do not disrupt the experience and appearance of websites. Get insights into ad performance and customer behavior through Amazon analytics tools.
This gives retailers – still operating on low margins – new revenue streams by selling advertising space to other brands. It also improves customer experience by serving relevant and engaging ads to shoppers, which could increase conversion rates. Finally, retailers don’t need to add the resources to do it themselves because Amazon takes care of all the complicated parts.
Early adopters and future prospects
Early adopters include iHerb, Weee! and Oriental Trading Company, which suggests the company is targeting small and medium-sized retailers to begin with.
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While Amazon faces competition from established players, its strong brand awareness, large advertiser base and cutting-edge technology give it a significant competitive advantage.
Amazon Retail Ad Service is likely a significant disruption in the retail advertising market. By providing retailers with access to its powerful advertising platform, Amazon is poised to reshape the way brands interact with consumers across the retail landscape. It could also be a boon for advertisers. Not only can this provide access to new audiences, but it also provides further impetus for standardization of measurement across retail media networks.
