Amazon's advertising business has become a massive revenue driver for the company, rising to challenge giants like Google and Facebook in the digital ad space. With its unique positioning as the world's largest online marketplace, Amazon Advertising leverages unparalleled consumer insights to provide advertisers with highly effective, data-driven ad experiences. But why has Amazon’s ad platform been so successful, and what would it take for other companies with vast consumer data to build their own advertising ecosystems? 

• First-Party Consumer Data at Scale
  Amazon's dominance in ecommerce gives it access to an extraordinary amount of first-party data. It knows what millions of users are searching for, buying, and considering at every stage of the shopping journey. It knows if a consumer is a bargain hunter, or a high spender. If a consumer is a family guy, or a single ready to mingle. This level of consumer intent data allows advertisers to target users with precision, increasing the chances of conversion. Amazon’s ability to provide relevant, timely ads based on this data is a primary reason for its success.
   
• Integration with Shopping Intent
  Unlike other platforms where ads interrupt content consumption (such as social media or video streaming), Amazon Advertising is integrated directly into the shopping process. Ads on Amazon often appear as search results or on product detail pages, ensuring that they are shown to consumers who are already in a purchasing mindset. This leads to higher engagement and conversion rates compared to platforms where ads feel more intrusive.
   
• Closed circuit full funnel from awareness to the thank you page
  Amazon allows brands to reach customers at all stages of the buying journey—from awareness to consideration to purchase. Whether through Sponsored Products, Sponsored Brands, or Display Ads, Amazon provides advertisers with multiple ways to engage customers, driving both discovery and direct sales. Additionally, post-purchase data enables retargeting and loyalty campaigns, closing the loop on customer acquisition and retention.
  Guaranteed incrementality
  Given that Amazon operates in a closed circuit operating its own ecosystem – it is practically guaranteed that every sale generated through the platform would be by definition an incremental sale.
  Amazon ads’s success inspired many companies to develop their own advertising business, leading to the phenomena known as “Retail Media”, or as Eric Seufert likes to call it: “Everything is an ad network”.

Should everything be an Ad Network ?

If your company has access to consumers, and if your company has any unique first party data points – advertising dollars may be easy for you to add, creating an additional revenue stream for you at almost 100% ROI. 
Some expected and unexpected players have entered this space: UBER, Walmart, Best Buy, Home Depot, eBay, Instacart, CSV, Target, Costco, and the list goes on. 

(Check out a list of retail networks published by Mimbi)

In a market where consumer wallet size isn’t growing, companies have to find new means of increasing revenues and profitability, and Advertising seems to be the way to go.
Consider a company like Netflix, that recently added an “ads supported “ tier. Previously, Reed Hastings, the Co-Founder of Netflix, was quoted saying that “Netflix won’t ever sell ads”.  While Netflix was growing fast, and had almost no real competitor in the market, Netflix was happy to sacrifice profitability for the sake of growth – but when Paramount+, Apple+ , Disney+, and all the other pluses came to market – Netflix started reporting softer growth numbers.
It was almost inevitable for Netflix to open up an ad based revenue line, allowing them to capitalize over the demand  from both Advertisers, as well as consumers.
Advertising helps companies increase their bottom line (i.e. profitability), and roll some of the “savings” to their customers which in turn increases retention and loyalty. 
The answer to the question “should everything be an ad network?” would be then: “Yes!”

What does it take to become an ad network?

Amazon’s success has inspired many other platforms to explore advertising. But building a successful ad platform requires more than just data. Here’s what other platforms would need:
 

• Depth and Breadth of Data
  Platforms like Amazon and Netflix already have rich consumer data, but the key is not just having data—it’s the type of data. Amazon’s competitive advantage is that it owns data directly linked to purchasing intent. For platforms like Netflix, which gathers data from app usage or media consumption, or Amazon, which has online shopping data, they need to translate this into actionable insights that directly correlate with consumer purchase behaviors.

• A seamless integration of advertising into the core product experience
  For an ad platform to thrive, ads must feel like a natural part of the user experience, not a disruption. Amazon does this well by embedding ads directly into the shopping process. Platforms aiming to build a similar experience need to leverage moments of high consumer intent, such as during shopping (Walmart), content discovery (Netflix), or app interactions (Apple). They must ensure that ads enhance, rather than interrupt, the consumer’s journey.

• The easy part: Advertising budgets                                                                                                    For an ad platform to thrive, ads must feel like a natural part of the user experience, not a disruption. Amazon does this well by embedding ads directly into the shopping process. Platforms aiming to build a similar experience need to leverage moments of high consumer intent, such as during shopping (Walmart), content discovery (Netflix), or app interactions (Apple). They must ensure that ads enhance, rather than interrupt, the consumer’s journey.

Platforms need to build trust with both advertisers and consumers. Advertisers must be assured that they’re reaching the right audience efficiently, while consumers need to feel confident that their data is being used responsibly. Amazon has long-established trust with its vast base of both sellers and buyers, a major factor in its ad platform’s success.
I’m willing to refer to this part as “the easy part” simply as the biggest benefit of retail media is that it almost guarantees incremental results to Advertisers.

Retail Media is here to stay

Retail Media isn’t that new of an invention. Prior to Amazon Ads it was the grocery stores charging CPG companies for “placement fees” and “endcaps”. 
Over the past years our global economy showed phenomenal growth thanks to various market conditions. To match or even just to continue showing growth – companies must find new revenue streams. Advertising has been a great way for companies to create a new profitable revenue line. 
The only challenge retail media has is its scalability. For Netflix Ads to grow – Netflix must grow. Adding more and more advertising placements will diminish the consumer experience and cause the advertising revenues to cannibalize the core product revenues.