Amazon has unveiled a new offering, the Retail Ad Service, which will allow any retailer to easily offer advertising on their digital platforms using the same technology that powers ads on Amazon.com.
The service, which is built on the Amazon Web Services (AWS) cloud infrastructure, enables online retailers to show product ads on their search, browse and product pages. Customers that click on an ad complete their purchase in the retailer’s online store. The service is currently in beta with multiple retailers, including iHerb, Oriental Trading Company and Weee!, and will launch with Tilly’s, as well as other retailers, soon.
A New Take on Retail Media
The new offering could be incredibly disruptive to the rapidly evolving world of retail media. Amazon already captures more than three-quarters of the U.S. retail media market, in large part due to its head start; in fact, some would argue Amazon actually started it all when it launched its advertising platform in 2012.
Now, Amazon is giving retailers (many of which have launched their own competitive media networks in recent years) plug-and-play access to its advanced technology in order to easily launch their own media offering. In exchange, Amazon will take a portion of the ad revenue, as well as a fee for the technology infrastructure, the company said in response to a query from Retail TouchPoints.
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The move is not without precedent at Amazon/AWS, which has for years offered technology and infrastructure developed in-house for its own retail operations — including its Just Walk Out autonomous retail tech, call center solutions, product recommendation tools, and most recently, its Prime fulfillment infrastructure — as third-party solutions to other retailers.
“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, VP of Ads Measurement at Amazon in a statement. “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.”
Amazon Aims to Expand Advertising Opportunities for Retailers, Brands
The ads will incorporate product availability and price, in addition to contextual information such as shopper search query, category or product being viewed to ensure customers see ads for desired and available products. Retailers will determine the ad creative formats they want to offer, where ads appear across their apps and websites, and how many ads are shown. They’ll also be able to determine what customers see after clicking on an ad, such as directing traffic to the product page, providing a ‘quick view’ of the product or enabling the customer to add the product directly to their cart.
“This innovative solution and proven technology allow us to deliver more relevant and personalized ads to our shoppers, enhancing their experience while driving stronger engagement and conversions,” said Neil Folgate, SVP of Global Marketing at iHerb in a statement. “With over 1,200 shared brands already active on Amazon Ads, this creates a frictionless opportunity for advertisers to connect with iHerb’s highly motivated audience and drive measurable results.”
Participating retailers also can choose to make their advertising offerings available via the Amazon Ads console and APIs, thereby giving Amazon advertisers the chance to discover additional opportunities to scale their reach. Advertisers already using Amazon Ads will see available retailers in their Amazon Ads console or API integrations. They can then create and manage their campaigns for each retailer, as well as access reporting, through their existing Amazon Ads workflows.
“Amazon’s Retail Ad Service has the potential to be transformative for advertisers,” said Drew Habeck, SVP of Media at digital media solution Flywheel in a statement. “This streamlined approach allows us to efficiently manage our advertising efforts across multiple retailers, maximizing our reach. Tapping into Amazon’s expertise in delivering relevant, contextual advertising at all points of the consumer path to purchase is invaluable.”
Amazon Retail Ad Service operates on dedicated systems with stringent access controls to ensure that retailer information is separated from Amazon Ads and other Amazon businesses. Ad measurement takes place within AWS Clean Rooms to enable privacy-safe collaboration and the generation of aggregated, anonymized reports for both the retailer and its advertisers.
