Amazon has built the fastest-growing major ad business in the US by stacking three assets: unmatched purchase data, the dominant retail media network, and a streaming service with hundreds of millions of ad-supported viewers. In 2026 it is adding agentic AI tools that plan and run campaigns end to end.

This FAQ covers Amazon Ads' scale, its expansion beyond the marketplace, and how advertisers should use it.

How big is Amazon's advertising business?

Amazon's Q4 2025 ad revenues rose 23% YoY to $21.3 billion, per a February 2026 EMARKETER article. EMARKETER forecasts Amazon's US ad revenues will increase 17.9% YoY in 2026 to $56.71 billion, outpacing Meta's expected 14.2% growth and Google's 5.6%, though still trailing both companies by billions in overall ad revenues. The growth trajectory is the story: Amazon is closing the gap with the Google-Meta duopoly on the strength of retail media, streaming inventory, and a steady rollout of new ad tools, which EMARKETER analysis says makes it an increasingly competitive platform for full-funnel campaigns.

Why does Amazon dominate retail media?

Amazon's retail media position rests on its commerce share. Amazon accounted for more than 75% of all US retail media ad spending in 2025, a function of its 40.6% share of US ecommerce sales, per EMARKETER. The lead over rivals is wide: Amazon will command $56.71 billion in US retail media ad spending in 2026, with second-place Walmart at $5.99 billion, per an EMARKETER forecast. Sponsored products on the marketplace remain the core, powered by first-party purchase data that ties ad exposure directly to transactions. For most brands that sell on Amazon, this inventory is effectively mandatory: It sits at the bottom of the funnel where share is won or lost.

How does Prime Video fit into Amazon's ad business?

Prime Video gives Amazon the top-of-funnel reach its marketplace ads lack. The service's ad-supported tier had over 315 million viewers as of November 2025, per EMARKETER. Advertiser adoption is following: 59% of marketers increased investment in Amazon Prime streaming over the past year, per a DoubleVerify survey cited by EMARKETER. The combination is Amazon's full-funnel pitch: Streaming ads build awareness, sponsored products convert it, and closed-loop measurement connects the two with purchase data. Amazon also launched location-based interactive video ads to deepen Prime Video's options. This positions Amazon as the only platform pairing TV-scale video reach with native checkout data.

What AI advertising tools does Amazon offer?

Amazon rebuilt its ad stack around AI in late 2025, per EMARKETER:

• Campaign manager. A platform merging Amazon's Ads Console and DSP into a streamlined solution for full-funnel campaigns.
• Ads Agent. An AI-powered assistant that manages hundreds of campaigns across accounts.
• Creative Agent. A rebrand of Creative Studio tailored for streaming ads, capable of creating campaign material from ad concepts.
• Full-funnel agentic tool. Uses agentic AI to create and run multichannel campaigns, starting with streaming and completing conversions on a brand's site or sponsored Amazon ads.

EMARKETER analysis notes Amazon's ability to close the gap with Google and Meta hinges on whether these AI tools deliver stronger campaign performance than rivals' offerings.

How is Amazon putting ads inside AI shopping assistants?

Amazon is moving conversational advertising from experiment to product. The company is migrating ad capabilities from its Rufus shopping assistant, including sponsored ads and product and brand prompts, to Alexa for Shopping, which uses non-shopping signals like recipe searches and music preferences to improve relevance, per EMARKETER.

Early results are promising: Almost 20% of shoppers who interact with a sponsored prompt continue the conversation about that brand, and around 70% of those who buy after clicking a sponsored prompt are new to the brand. Amazon is also exploring powering ads in third-party chatbots, extending its ad business beyond retail media, per a March 2026 EMARKETER article.

How should marketers approach Amazon advertising in 2026?

Buy Amazon as a full-funnel system rather than a sponsored-products line item. Priorities:

• Defend the bottom of the funnel first. Sponsored products remain the highest-intent inventory in digital advertising; share lost there compounds.
• Test Prime Video for incremental reach. With over 315 million ad-supported viewers and closed-loop measurement, streaming inventory extends campaigns beyond the marketplace.
• Pilot the agentic tools with oversight. Ads Agent and the full-funnel campaign tool can compress workflow, but performance should be validated against independent measurement before scaling.
• Prepare for conversational placements. Sponsored prompts in Alexa for Shopping reward brands with strong product data and reviews, the same eligibility signals AI assistants use for recommendations.
• Watch pricing power. Amazon's growth and dominant retail media share give it auction leverage; diversifying retail media spend across rival networks hedges rising costs.

We prepared this article with the assistance of generative AI tools and stand behind its accuracy, quality, and originality.

EMARKETER forecast data was current at publication and may have changed. EMARKETER clients have access to up-to-date forecast data. To explore EMARKETER solutions, click here.