Amazon is selling the technology that powers its $50 billion advertising

Amazon is set to expand its already massive advertising empire by allowing other retailers to use the same technology that powers its $50 billion ad business on their own e-commerce platforms. As Adweek reports, the new beta version of Amazon’s Retail Ad Service lets third-party retailers display contextually relevant ads on their product, search, and browse pages. This is made possible by Amazon’s machine learning models, which are trained on trillions of shopping signals.

Through this service, participating retailers gain access to Amazon’s existing network of advertising customers. Brands that already use Amazon's advertising platform will also be able to advertise on third-party sites, expanding their presence beyond Amazon Marketplace. The move not only allows Amazon to make more money from retail media (the ads that appear during online or offline purchases), but it could also give the company access to even more consumer data, which could raise concerns from regulators such as the FTC. 

The business model has the evolution of Amazon (AWS) web services and a remarkable similarity. AWS, which was born to optimize Amazon's performance, was ultimately a very profitable service provided by other companies. Similarly, by sharing its advertising technology with retailers, Amazon is establishing itself as a leader in another area of ​​online commerce, effectively turning its in-house tools into profitable standalone products.

Amazon's retail ad services could give the company a major edge in the growing retail media market and further solidify its position as a major player in the advertising industry. However, this expansion could also arouse a meticulous examination of regulators concerned with the use by Amazon of consumer data and advertising.