Amazon’s rapid expansion in digital advertising, supported by a major platform overhaul and AI integration, threatens to reshape the duopoly of Google and Meta, with forecasts indicating its share could triple by 2025.
Amazon Advertising’s rapid ascent within the global digital advertising landscape is reshaping the dynamics traditionally dominated by the duopoly of Google and Meta. Industry figures place the sector’s total at around $777 billion, with...
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Amazon steadily carving out a significant and growing share. In its latest quarterly earnings, Amazon disclosed a 24% year-over-year increase in advertising revenue to $17.7 billion, driven by robust sales to sellers, vendors, publishers, and authors through its sponsored ads, display, and video advertising programs. This performance contributed to a surge in Amazon’s stock price, which rose over 13% following the earnings announcement.
Analyst forecasts from eMarketer project Amazon Advertising’s revenues to more than triple by 2025, reaching approximately $67 billion, and potentially exceeding $90 billion within two years. This growth trajectory would elevate Amazon to an estimated 8.6% share of the global media dollar market, consolidating its position as the third-largest advertiser behind Google and Meta. Other market research indicates Amazon’s share could rise even further, nearing 13% by 2024 in the U.S. alone, signalling considerable momentum toward closing the historic gap with the incumbents. Comparatively, Google and Meta continue to command vast ad spends, with Alphabet generating over $74 billion and Meta exceeding $50 billion in the third quarter, underscoring the considerable challenge Amazon faces to disrupt this duopoly fully.
Recognising the importance of evolving its advertising technology, Amazon has undertaken a significant overhaul of its demand-side platform (DSP), which has long been criticised by advertisers for its cumbersome user experience. Ahead of its upcoming unBoxed conference, Amazon Ads executives outlined plans to launch Campaign Manager, a unified interface designed to simplify campaign management by consolidating Sponsored Ads and DSP functionalities into a single platform. Meredith Goldman, Amazon Ads Director of DSP, acknowledged that redesigning the user interface to reduce friction has been a top priority, given that previous platform complexities often detracted from leveraging Amazon’s valuable purchase data.
Amazon’s planned rollout will also introduce a “smart mode,” powered by artificial intelligence, enabling advertisers to use conversational commands for bid adjustments and campaign controls, alongside an “expert mode” for manual configurations. This innovative approach aims to streamline campaign execution, reduce latency, and enhance reporting speeds through substantial underlying technology stack improvements. The transition to these new capabilities will be gradual, spanning into 2026, accompanied by extensive education efforts to mitigate disruption for users.
One of the persistent myths Amazon seeks to dispel is that its advertising services only cater to brands selling on its retail platform. Goldman clarified that the revamped Campaign Manager targets businesses of all sizes, lowering barriers to entry particularly for small and medium-sized businesses (SMBs) that had been historically more reliant on Sponsored Ads alone due to DSP complexities. Additionally, through partnerships with firms like Pacvue and SKai, Amazon is reportedly offering more accessible fee structures and commercial terms to advertisers, although the company itself has not publicly commented on these developments.
This strategic push comes amid broader efforts by Amazon to “stay nimble” through AI investments and operational streamlining. The company recently announced one of its largest workforce reductions, cutting approximately 14,000 jobs, with some industry sources estimating that up to 20% of the Amazon Marketing Cloud (AMC) and DSP teams were affected. While official details remain scarce, it is clear that Amazon is focusing on investing in technology and automation to drive future growth even as it reduces headcount.
Amazon’s advertising evolution is significant not just for its commercial implications but also for its potential to reshape digital ad market shares. Forecasts suggest that Amazon, alongside Alphabet and Meta, will control over half of the global advertising market by 2025. Within retail media specifically, Amazon is expected to dominate with over a third of the market. Analysts highlight how Amazon leverages its e-commerce data advantage, offering targeted ad solutions that continue to appeal to advertisers seeking measurable returns on investment. Still, catching up to the scale and refinement of Google’s and Meta’s ad platforms remains a considerable task.
Amazon executives remain measured in their competitive comparisons, emphasising customer simplification and workflow efficiency over direct parity with leading DSP platforms like The Trade Desk or Google’s DV360. As Goldman remarked, the focus is on “meeting customers where they are today” and bringing them along on the ongoing wave of technological evolution. This blend of product innovation, AI integration, and user experience revamping positions Amazon Advertising not only as a growth engine within the company’s broader strategy but as a formidable challenger in the global advertising arena, promising to reshape the landscape in the years ahead.
Source: Noah Wire Services
