January 8th-January 14th

Below is a roundup of last week’s notable industry news, with summaries and our opinions. Disney and friends are backtracking on Venu (again) and T-Mobile made a big, surprising splash. But the top story is Amazon’s new product which is for… its competitors?

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Top Story 👁️ 

Amazon aims to expand advertising business by letting retailers use its ad tools on their stores
Source: CNBC
January 9th, 2025

Summary: US retailers will soon be able to use Amazon’s ad tech tools to sell product ads in their online stores. The new offering called Amazon Retail Ad Service is built on AWS and in beta testing with smaller retailers iHerb, Oriental Trading Company, and Weee!, with Tilly's joining soon. Retailers can use the service to sell contextual ads on their sites, including in search results and product pages. Fees for the service will be based on usage. Retailers can choose the creative format, placement, and number of ads that run on their sites. Amazon’s machine learning models and ad measurement and reporting tools are also available through the service. 

Amazon says the service will help retailers easily connect to brands using Amazon Ads. It pits Amazon against other retail ad tech companies like Criteo, Epsilon, and Koddi, opening a new front in Amazon’s ad strategy. Other companies are also building ad tech tools for retailers, including Microsoft, which just announced two platforms to help retailers use first-party data to target shoppers with ads from non-endemic brands and manage brand relationships.

Amazon has built ad tech tools like a demand-side platform (DSP) but hasn't been involved in selling ads for other retailers until now. It generated $14.3B in ad revenue last quarter, mostly from sponsored product ads in its search results and product pages.

Opinion: On the surface, this is a bit of a head-scratcher. Most retailers view Amazon as their single, greatest threat. Companies like Criteo and Koddi pitch retailers on the vision that they can compete with Amazon by using their tech. So why would retailers turn to Amazon to help them compete with… Amazon? And why would Amazon want to enable this?

From the retailers’ perspective, working with Amazon may open up a spigot of ad demand from brands that they just can’t access elsewhere or on their own. And at the end of the day, cold, hard cash speaks louder than a vision. 

From Amazon’s perspective, as the leader in commerce media, lifting all commerce media boats can only help them. Being able to pitch brands on the idea of running ads across many different retailers, including Amazon’s, through a single buy would be extremely enticing. It would bring more dollars into the commerce media ecosystem, benefiting Amazon. It would also be nice for Amazon to have many of their competitors in their back pocket.

Remember when Google, the publisher, started selling tech to its competitors, other publishers? That worked out pretty well for Google…

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That’s It For This Week 👋

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