The Evolution of Amazon Ads: A Brief History

As an Amazon ad agency, we like to think we've gotten pretty good at Amazon Ad management over the last 10years, which is pretty much when it was founded. But where did it come from? And why should e-commerce brands care? Time for a little history lesson.

Since its inception in 1994, Amazon has grown from a humble online bookstore to a global e-commerce giant. As Amazon’s marketplace expanded, it soon became clear that there was an opportunity for a new kind of digital advertising. Thus, Amazon Advertising, formerly known as Amazon Marketing Services (AMS), was born, allowing businesses to leverage Amazon's vast user base and analytics capabilities. This article will delve into the history of Amazon Ads, tracing its evolution from a simple promotional tool to a powerhouse in the digital advertising world.

The Early Years

Amazon's journey into advertising began in 2008 when it launched "Product Ads," a service that allowed businesses to advertise their products on Amazon's platform. However, these early attempts were somewhat rudimentary. Businesses could showcase their products, but the system lacked sophistication in targeting and measuring ad performance.

In 2012, the company launched Amazon Advertising Platform (AAP), offering advertisers programmatic buying options, more extensive targeting capabilities, and advanced analytics. This service marked a significant step forward for Amazon in the digital advertising space, positioning it as a direct competitor to Google and Facebook.

Expansion and Innovation: Amazon Marketing Services (AMS)

In 2015, Amazon launched Amazon Marketing Services (AMS), a suite of cost-per-click advertising solutions. AMS offered three primary ad formats: Sponsored Products, Headline Search Ads (later renamed as Sponsored Brands), and Product Display Ads. Sponsored Products became particularly popular as they allowed sellers to promote individual listings, appearing in search results and product detail pages.

AMS's launch was significant as it provided brands a way to reach Amazon's vast customer base at critical points in their buying journey. Furthermore, Amazon's wealth of consumer data allowed for superior targeting and personalization, leading to high conversion rates and ROI for advertisers.

Rebranding to Amazon Advertising

In 2018, Amazon consolidated its advertising services under one brand: Amazon Advertising. This rebranding aimed to simplify the complex array of services Amazon offered by bringing everything under one umbrella. The rebrand saw the end of Amazon Marketing Services, replaced by Amazon Advertising Console, while AAP was renamed Amazon DSP.

In the same year, Amazon also introduced new advertising types, including Sponsored Display and Video Ads, further expanding their suite of services. These changes demonstrated Amazon's commitment to continuous innovation in the digital advertising space.

Impacts of Amazon Advertising

Amazon's vast trove of consumer data has given it an edge in the digital advertising market. It's not just about who the users are; it's about what they buy, how often, and in response to what kind of advertising stimulus. This level of detail is unparalleled and gives advertisers (and their Amazon ad agencies) on Amazon a unique advantage.

Amazon Ads Today

Amazon Advertising has grown into a key player in the digital advertising industry. It accounted for about 10% of the digital ad market share, placing it third behind Google and Facebook.

Amazon's advertising services have evolved to include display ads, video ads, custom ads, and more, across Amazon-owned websites and apps, as well as on third-party websites. Furthermore, with the rise of Amazon's own devices like Echo and Fire TV, advertisers have new avenues to reach potential customers.

In recent years Amazon Advertising has continued to grow and evolve, further cementing its position in the advertising world. The continued growth of e-commerce, accelerated by the COVID-19 pandemic, likely fueled Amazon's advertising success with brands and Amazon ad consultants alike.

Conclusion

The history of Amazon Ads is one of innovation, adaptation, and growth. From its early days as a simple product promotion tool to becoming a significant player in digital advertising, Amazon has continually evolved its advertising offerings to meet the changing needs of advertisers.

Because of the growing complexity the system has and, due to scale the ease of which it can be easy to waste money, it's probably best to look at an Amazon advertising agency to help you use the powers of the platform to grow your business quickly and efficiently.