What Is Amazon Retail Advertising Service?

When you think of running ads online, you'll likely default to Google or Meta; the two tech giants have the most advertising inventory and the data to build targeted campaigns that work. If you're not getting bang for the buck with those two ecosystems, you'll likely not have a good time with other performance marketing platforms with a smaller footprint.

How many people are running their business on Bing ads? I venture to say none.

But that doesn't mean brands are only handing over money to Google and Meta; in fact, the market is desperate for alternatives, and we can see that in the growth of Amazon's advertising business, which continues to break records.

In Q3 2024 alone, Amazon reported a staggering $14.3 billion in ad revenue. Granted, most of it is through its own platform, but it has begun to expand its inventory with streaming ads and now third-party ad placements.

Selling online isn't the silver bullet it once was; everyone is selling online, and there's just so much competition for eyeballs; the e-commerce landscape relies on getting your product in the eyes of the right person at the right time, and visibility is everything.

If any business knows a thing or two about selling online, it's Amazon.

The eCommerce giant has a wealth of data and learnings from building out its internal ad system and feels it can package and sell it to third parties.

This is where Amazon Retail Advertising Service (RAS) comes into play – a powerful advertising platform that helps businesses reach their target audience effectively on the world's largest online marketplace.

What is Amazon Retail Advertising Service?

Amazon's new Retail Ad Service allows U.S. retailers to implement Amazon's ad targeting and measurement tools on their own websites.

Just like you're enjoying Google and Meta's ability to monetise their data sets, RAS leverages Amazon's vast customer data and shopping insights to help advertisers reach customers already in a buying mindset.

RAS will allow third-party websites to:

• Display contextually relevant ads in search results and product pages.
• Customise ad design, placement, and frequency.
• Access Amazon's ad measurement and reporting tools.
• Manage data through separate AWS accounts.

Retailers that use the service can easily, and cost-effectively deliver contextually relevant ads in their online stores at the right place and time. Their customers can click on an ad and complete their purchase in the retailer’s online store.

So, if you're a retail store selling X brand shoes, you can upsell that brand for more exposure with your own PPC listings for search terms, as we see on Amazon.

The service makes it easy for retailers to offer their advertising to brands already using Amazon Ads, providing retailers a streamlined connection to advertisers.

Obviously, Amazon will keep all that data on AWS, only expanding its data sets on product interest and engagement outside its platform, sneaky, sneaky!

The service could provide Amazon with valuable data it can use to bolster its ad prediction and recommendation technology or use it to knock out competition in emerging niches.

They've done it before with Amazon sellers; why wouldn't they do it again with a product like this?

Key Features and Ad Types

Amazon RAS offers several advertising formats designed to meet different marketing objectives:

Sponsored Products

These are keyword-targeted ads that promote individual product listings. When shoppers search for specific terms, sponsored products appear in search results and on product detail pages.

This format is particularly effective for driving immediate sales and improving product visibility.

Sponsored Brands

Formerly known as Headline Search Ads, these ads showcase your brand logo, custom headline, and multiple products.

They appear at the top of search results, helping build brand awareness while driving sales.

Sponsored Brands are excellent for businesses looking to establish their presence on Amazon and introduce customers to their product line.

Sponsored Display

These self-service display ads help reach relevant audiences both on and off Amazon.

Using automated targeting, these ads can appear on product detail pages, customer review pages, and even third-party websites and apps.

They're particularly useful for retargeting customers who have viewed your products or similar items.

How Amazon RAS Works

The platform operates on a cost-per-click (CPC) model, meaning advertisers only pay when shoppers click on their ads.

This makes it a relatively low-risk advertising option, as you're only paying for actual customer interest.

The bidding process is auction-based, where advertisers compete for ad placement by setting their maximum bid for relevant keywords or product targeting options.

Benefits of Using Amazon RAS

As a retailer, you can add new monetisation features to your site and earn more revenue from your digital real estate, and you won't need to deal with all the technical hangups; all you do is set up the account and connect the API to your site.

Users will be able to customise the design, placement, and number of ads shown across their sites, as well as get access to Amazon’s ad measurement and reporting tools.

As for brands, it can make it easier for them to control their promotions across multiple e-commerce players; if more retailers are added to the RAS network, a brand could build campaigns and push products in certain areas or regions in real-time, all from one interface.

Brands can then adjust budgets based on which retailers are offering the best CPC or CPA.

Precise Targeting

One of RAS's greatest strengths is its targeting capabilities.

Advertisers can reach customers based on:

• Search keywords
• Product categories
• Shopping behavior
• Demographics
• Purchase history

Real-Time Performance Metrics

The platform provides detailed analytics and reporting tools that help advertisers track their campaign performance in real-time.

Key metrics include:

• Impression count
• Click-through rates
• Conversion rates
• Advertising Cost of Sale (ACoS)
• Return on Ad Spend (ROAS)

Brand Building Opportunities

Beyond immediate sales, RAS helps build long-term brand value. Through consistent exposure and strategic placement, brands can establish themselves as category leaders and gain customer trust over time.

Best Practices for Success

Keyword Optimisation

Success on Amazon RAS starts with thorough keyword research. Use Amazon's automatic targeting initially to discover converting search terms, then refine your manual targeting based on performance data. Consider both broad and specific keywords to capture different stages of the customer journey.

Strategic Bidding

Don't set and forget your bids. Regular monitoring and adjustment based on performance data is crucial. Start conservatively and increase bids on keywords that show strong conversion rates. Consider dayparting (adjusting bids by time of day) for maximum efficiency.

Quality Product Content

Your ads will only be as effective as the product pages they lead to.

Ensure your product listings have:

• High-quality images
• Detailed, benefit-focused descriptions
• Competitive Pricing
• Positive customer reviews

Regular Campaign Optimisation

Successful advertising on Amazon requires ongoing attention and optimisation.

Regular tasks should include:

• Reviewing search term reports
• Adjusting bids based on performance
• Updating negative keywords
• Testing new ad creatives
• Analysing competitor strategies

Measuring Success

Understanding your campaign's performance is crucial for optimisation. Key performance indicators (KPIs) to track include:

• Click-through rate (CTR)
• Conversion rate
• Return on ad spend (ROAS)
• Advertising cost of sale (ACoS)
• Total attributed sales

Amazon is expanding its ad inventory.

Amazon Retail Advertising Service represents a powerful opportunity for brands and sellers to increase their visibility and sales on the world's largest e-commerce platform.

By getting to grips with the various ad formats, implementing best practices, and continuously optimising campaigns on Amazon's internal ads, you'll become a specialist in using RAS in no time.

I don't think this product will serve every seller, but larger brands will see something like this as an attractive way to divert marketing spend. Businesses can effectively leverage RAS to achieve their marketing objectives and grow their presence with Amazon's growing ad network.

Success with Amazon RAS isn't instantaneous – it requires patience, strategy, and continuous optimisation. However, for brands willing to invest the time and resources, it can become a crucial component of their e-commerce growth strategy.

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Recommended reading

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Tags: Digital marketing, PPC, Ad Tech