Amazon aims to expand advertising business by letting retailers use its ad tools on their stores
BARCELONA, SPAIN – MARCH 2: The Amazon ads logo, the advertising solutions service formerly known as AMD or Amazon Marketing Services, during the Mobile World Congress 2023 on March 2, 2023, in Barcelona, Spain. (Photo by Joan Cros/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Amazon has turned into an online ad juggernaut in recent years, with brands paying big bucks for premium placement on the retailer’s websites. Now, Amazon is letting other sites use its ad technology for their own stores.
The new offering, called Amazon Retail Ad Service, allows companies to show “contextually relevant ads in the right place and at the right time” in search results, product pages and other areas of their site, Amazon said Thursday.
It’s initially available for U.S. retailers, which will pay fees based on usage levels. Prices weren’t disclosed.
Amazon in 2022 began breaking out ad revenue in its quarterly earnings reports, showing that the business had become a significant contributor to the company’s top and bottom lines. Ad revenue in the latest quarter came in at $14.3 billion, third to Alphabet and Meta in digital advertising.
That’s still much less than the sales Amazon generates from online stores and cloud computing, which came to $61.4 billion and $27.4 billion, respectively, in the quarter that ended in October.
The bulk of Amazon’s ad revenue comes from sponsored product advertisements, which are keyword-targeted ads that let brands promote certain items. Amazon has stuffed more of these sponsored items into search results and product pages over time. It also generates some ad revenue through streaming.
With Amazon Retail Ad Service, users will be able to customize the design, placement and number of ads shown across their sites, as well as use Amazon’s ad measurement and reporting tools.
Amazon said the service operates on systems that are separate from its own retail business, and retailers manage their data via AWS accounts.
The service could provide Amazon with valuable data it can use to bolster its ad prediction and recommendation technology. The company said early customers include health and wellness retailer iHerb, Asian grocery startup Weee! and Oriental Trading Co., which sells toys, party and craft supplies.
“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,” said Paula Despins, vice president of Amazon Ads Measurement, in the press release.
The announcement comes a few days before the National Retail Federation’s annual trade show.
It’s not the first time Amazon has sold its in-house technology and services to third parties.
Amazon Web Services began as cloud infrastructure to support its online retail business. The company launched AWS as a business in 2006. In 2022, the company launched Buy With Prime, which combines Amazon’s payment and fulfillment services for other retailers.
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Air taxi maker Joby Aviation in a new lawsuit accused competitor Archer Aviation of using stolen information by a former employee to “one-up” a partnership deal with a real estate developer.
“This is corporate espionage, planned and premeditated,” Joby said in the lawsuit filed Wednesday in a California Superior Court in Santa Cruz, where the company is based.
Archer and Joby did not immediately respond to CNBC’s request for comment.
The lawsuit alleges that former U.S. state and local policy lead, George Kivork, downloaded dozens of files and sent some content to his personal email two days before he resigned in July to take a job at Archer, which had recruited him.
By August, Joby said a partner that worked with Kivork said it had been approached by Archer with a “more lucrative deal.” Joby alleges that the eVTOL rival’s understanding of “highly confidential” details helped it leverage negotiations.
Joby also said the developer attempted to terminate the agreement, citing a breach of confidentiality.
Kivork refused to return the files when Joby approached him after conducting an investigation, according to the suit. The company also said Archer denied wrongdoing, and would not disclose how it learned about the terms of the agreement or provide results from an internal investigation it allegedly undertook.
The lawsuit comes during a busy period for electric vertical takeoff and landing (eVTOL) technology as companies race to gain Federal Aviation Administration certification to start flying commercially. ‘
The sector has also benefitted from President Donald Trump‘s newly minted eVTOL pilot program.
Joby argued in the complaint that it’s “imperative” to protect Joby’s work “from this type of espionage” to promote the sector’s success and ensure fair competition.
Last week, Joby said it completed its first test flight for a hybrid aircraft it’s working on with defense contractor L3Harris. This month, Amazon-backed Beta Technologies, another electric flight company, also went public on the New York Stock Exchange.
Joby shares have more than doubled over the last year, while Archer is up about 68%.
In August 2023, Archer settled a previous legal dispute with Boeing-owned Wisk Aero over the alleged theft of trade secrets. As part of the deal, Archer agreed to use Wisk as its autonomous tech partner.
A hearing is scheduled for March 20, 2026.
Joby and Archer year-to-date stock chart.
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