Amazon plans to expand its advertising business by allowing retailers to utilize its ad tools on their stores.

• Amazon is allowing other retailers to utilize its proprietary advertising tools to display sponsored ads on their own websites.
• The service simplifies targeted ad campaigning for other retailers on their online stores.
• In the U.S., Amazon's digital ad business has become a powerhouse, ranking third behind Alphabet and Meta.

In recent years, Amazon has become an online ad juggernaut, with brands paying big bucks for premium placement on its websites. Now, Amazon is allowing other sites to use its ad technology for their own stores.

Amazon Retail Ad Service enables companies to display "contextually relevant ads in the appropriate locations and at the optimal moments" on their search results, product pages, and other areas of their website, Amazon announced on Thursday.

U.S. retailers can now purchase the product, with fees determined based on usage levels. The prices have not been disclosed.

In 2022, Amazon started reporting its ad revenue in its quarterly earnings, indicating that it had become a significant contributor to the company's revenue. The latest quarter's ad revenue was $14.3 billion, ranking third in digital advertising.

In the quarter that ended in October, Amazon generated $61.4 billion in sales from online stores and cloud computing, which is significantly more than the sales generated from both categories combined.

Amazon generates the majority of its ad revenue from sponsored product advertisements, which are targeted ads that allow brands to promote specific products. Over time, Amazon has increased the number of sponsored products displayed in search results and product pages. In addition to this, Amazon also earns some ad revenue through streaming.

Users can personalize the appearance, location, and quantity of ads on their websites with Amazon Retail Ad Service, while also utilizing Amazon's ad tracking and analysis features.

Amazon can use valuable data from the service to improve its ad prediction and recommendation technology, as stated by the company. Early customers of the service include iHerb, Weee!, and Oriental Trading Co., which sells toys, party, and craft supplies.

In the press release, Paula Despins, vice president of Amazon Ads Measurement, stated that the product was designed to benefit retailers, advertisers, and shoppers, and that they anticipate it improving outcomes, increasing sales, and enhancing the shopping experience.

The National Retail Federation's annual trade show is preceded by an announcement a few days in advance.

Amazon has previously sold its internal technology and services to external companies.

In 2006, Amazon Web Services was launched as a business to support the company's online retail operations. In 2022, Amazon introduced Buy With Prime, a service that integrates the company's payment and fulfillment services for other retailers.

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