Amazon’s advertising business, Amazon Ads, is gaining momentum as a high-margin, fast-growing revenue stream. With Prime Video now featuring ads, Amazon is capitalizing on intent, data, and transactions to unlock new monetization opportunities. This strategic move could reshape Amazon’s long-term outlook and significantly impact its profitability.
Amazon’s success in advertising stems from its ability to leverage consumer intent and data to drive action. By utilizing vast amounts of shopping, search, and behavioral data, Amazon can deliver highly targeted ads that offer closed-loop attribution. This efficiency makes Amazon’s ad platform one of the most powerful and profitable in the world, positioning the company as a key player in the retail media space.
In 2024, Amazon’s advertising revenue reached $56 billion, making it the third-largest digital advertising company globally. The first quarter of 2025 saw Amazon Ads generate $13.9 billion, outpacing the growth of the company’s traditional revenue streams. With a projected revenue of $67 billion in 2025 and a potential $79 billion by 2026, Amazon Ads is on track to become a $100 billion business, driving up the company’s overall operating margin.
As Amazon expands its advertising offerings beyond e-commerce product pages, it is entering new territories like streaming. By integrating ads into Prime Video and other platforms like Twitch and Fire TV, Amazon aims to build a comprehensive advertising ecosystem that targets consumers at every stage of their journey. With Bank of America predicting significant ad revenue from Prime Video alone, Amazon’s ad business is poised for further growth and profitability.
Investors should pay close attention to Amazon’s advertising segment, as it has the potential to become a major profit engine for the company. With the rapid growth and strategic positioning of Amazon Ads, investors may need to reconsider their investment decisions regarding Amazon’s stock. The advertising business could play a crucial role in shaping Amazon’s future performance and overall market value.
Read more at Nasdaq: Amazon Is Quietly Building a Massive Advertising Business