How Amazon has set its sights on the $88B online ad market, as companies like Verizon, AT&T, and Geico ramp up ad buys, despite not selling directly on Amazon
Julie Creswell / New York Times :
Context & Ripple Effects
Amazon had been telegraphing this move for months: sources reported plans to expand ad offerings across search and video in 2018 and push off-platform sales through partners like Kargo (2018 expansion plans), followed by a test letting merchants buy display spots across other sites and apps as Amazon stopped buying Google shopping ads (off-platform display test). What the NYT adds is the demand side: Verizon, AT&T, and Geico — brands with no storefront on Amazon — are now buying in.
That matters because these are exactly the advertisers whose earlier NBC-sourced warnings framed the trade-off: feeding Amazon the data and market power that could eventually be turned against them (advertiser data concerns). The corpus shows where the trajectory led — Kantar later ranked Amazon the top US ad spender at $6.9B in 2019, and by 2022 its ad revenue hit $38B, larger than the entire global newspaper industry.
First-order effects
- Verizon, AT&T, and Geico shift budget to Amazon's platform despite having nothing to sell there, paying for access to Amazon's shopper data rather than transaction-driven retail media.
- Amazon converts its first-party purchase data into a third ad-revenue stream alongside Google and Facebook, monetizing an asset neither duopoly player possesses.
Second-order effects
- Google and Facebook face a challenger whose pitch — ads targeted by what people actually bought — attacks the weakest point of intent-inferred targeting, forcing both to defend brand budgets they took for granted.
- Verizon's own attempt to build a data-driven ad rival through Yahoo and AOL now competes against the same shopper-data advantage it lacks, pressuring telco ad ambitions built on wireless subscriber data.
Third-order effects
- If non-endemic brands keep funding Amazon's ad stack, the line between retailer and media company dissolves structurally: advertisers end up paying a platform that is simultaneously their channel, their competitor, and increasingly their biggest rival for consumer attention.
- Advertising consolidates around whoever owns transaction data, shifting pricing power from audience-measurement firms and agencies to platforms with closed-loop purchase signals — the pattern behind Amazon's rise to top US ad spender within two years of this report.
The trend: Brand advertising is migrating from the Google-Facebook duopoly toward commerce platforms that own purchase data, turning retailers like Amazon into the internet's third force in media.