Ahead of Retail MediaX II on 09 October 2024, a company profile highlights how the daddy of all retail media networks is still the one to watch for new trends and developments.
Amazon Advertising has emerged as a (the?) dominant force in the retail media landscape worldwide, with the company revealing on its analysts briefing in May 2024 that revenues for 2023 were just shy of US$47bn. For reference, Q4 2024 Amazon Advertising revenues reached $14bn, with the holiday season always providing an uptick.
This alone makes up a sizeable chunk of the global retail media market, estimated to be worth between $115bn and $150bn in 2023.
So, what makes Amazon so successful at retail media? Customer data. It has among the largest and richest customer database out there and has honed its retail media offering over many years to currently be at the pinnacle of the sector.
The retailer’s retail media offering is broad, offering a wide range of services that brands and even other retailers can leverage, creating a retail media ecosystem of its own.
It also offers a DSP (demand-side platform), a programmatic buying platform that allows brands to bid on ad inventory across exchanges beyond Amazon, reaching relevant audiences at scale.
The advantages for brands are what you would expect from a retail media network – targeted reach driven by data analysis, along with excellent campaign tracking and measurable results. It also seamlessly integrates the self-management and optimisation of campaigns with the Amazon seller or vendor central interface. The key to its success is that it does all this at an enormous scale.
Yet Amazon Advertising is poised for even more growth. With constant innovation in ad formats, targeting capabilities and measurement tools, it remains a powerful platform for brands to reach targeted audiences within the Amazon shopping journey, at the precise point when shoppers have buying intention but have yet to settle on a product.
Its integration with other Amazon services such as Alexa and Amazon Prime – which reaches a potential audience of 200mn people – further strengthens its position as a comprehensive advertising solution.
However, challenges remain. Navigating evolving data privacy regulations requires a commitment to transparent data collection and user consent – a challenge faced by all retail media networks. It also faces the challenge of attributing conversions within the Amazon journey, with the development of multi- touch attribution models crucial.
Perhaps Amazon Advertising’s leadership will be eroded as other retailers build out their own networks. However, Amazon currently stands so far ahead of all of them – it’s worth more than all the mainstream ad marketing holding companies combined – that while its growth may be slowed, its position is unlikely to be challenged any time soon.
This profile appears in the Retail Media 2024 report, which was introduced during the first Retail MediaX event this June.
It is one of nine profiles, with some of the worlds most recognisable retailers looked at, including Boots Media Group, CO-OP Media Network, Market Media, NECTAR360, Roundel, TESCO Media and Insight, Unlimitail and Uber Journey Ads.
The wider report investigates how this ‘new’ market has come into being, what it means for the stakeholders across retail, brands, suppliers, agencies, media companies and tech vendors.
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