Amazon's advertising business generated $19.8 billion in quarterly revenue as AI-powered marketing tools and conversational shopping accelerated digital advertising growth.
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Amazon's advertising business continued its streak, achieving 26% growth to $19.8 billion, with further investments in its AI-powered advertising and marketing. These figures prove once again that Amazon is one of the best companies in digital advertising, and it continues to be a main source of income for the company rather than retail.
Advertising grew faster than the company's retail operations; Amazon's North American and international retail divisions posted 16% and 15% respectively. The results also highlight the future of AI-powered marketing platforms, as Amazon integrates artificial intelligence into both advertiser solutions and customer shopping experiences.
According to Amazon CEO Andy Jassy, the company's advertising business is one of its strongest operations technologies. For example, during the quarter, Amazon introduced the Ads Agent platform, based on artificial intelligence technology, which allows advertisers to automate their campaigns, optimize, and target customers. As a result, advertisers who use the Ads Agent platform reduced their cost per impression by 8% and customer acquisition costs by 6%.
Amazon further diversified its AI shopping ecosystem through integrating its Rufus shopping assistant with Alexa+ to form Alexa for Shopping. This conversational assistant helps consumers find products, compare them, track pricing, and automate orders. According to the company, users who enjoy the AI-enabled shopping experience spend up to 40% more per order than conventional buyers.
Its expanding media assets have further enhanced Amazon's advertising ecosystem, with Prime Video experiencing unprecedented viewership of NBA and NASCAR games, giving brands additional space for their advertisements and, at the same time, allowing integration of media campaigns with consumers' purchasing behavior.
Industry experts suggest that Amazon's move may signal an evolution in digital advertising, with brands optimizing their digital marketing rather than relying only on search engines and social media platforms. By merging the e-commerce platform, streaming media, AI, and advertising into a single ecosystem, Amazon continues to distinguish itself from its competitors in the digital advertising world. Business Honor believes AI-powered advertising is transforming digital marketing by making campaigns more intelligent, measurable, and personalized while strengthening customer engagement.
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