Amazon's Advertising Revenue Climbs 26% to Nearly $20 Billion as AI Expands Across Marketing Tools

Amazon's advertising business continued its strong growth during the latest quarter. The company reported advertising revenue of $19.8 billion, up 26% year over year, making it one of Amazon's fastest-growing business segments.

The performance also exceeded the growth recorded by Amazon's retail operations. During the same period, North American retail revenue increased 16%, while international sales grew 15%. As a result, advertising is becoming a larger contributor to the company's overall business.

Overall, Amazon generated $200.6 billion in quarterly revenue.

Advertising Remains a Key Growth Business

Amazon President and CEO Andy Jassy described advertising as one of the company's strongest-performing businesses, alongside cloud computing and artificial intelligence (AI).

The company said its advertising segment continued to benefit from growing demand from brands that want to reach customers across Amazon's shopping and media platforms.

However, the latest quarter also showed that Amazon is changing how advertisers create and manage campaigns.

AI Takes a Larger Role in Campaign Management

During the quarter, Amazon expanded Ads Agent, an AI-powered tool that helps advertisers plan, launch, and optimize campaigns.

According to the company, advertisers using Ads Agent have recorded an 8% reduction in cost per impression and a 6% decrease in customer acquisition costs.

These improvements suggest that AI can reduce the manual work involved in campaign planning. Instead of relying heavily on traditional workflows, advertisers can automate several tasks, making campaign setup faster and more efficient.

As AI capabilities improve, more marketing activities may shift toward automated decision-making.

Amazon Brings AI Into the Shopping Experience

Amazon is also using AI to change how customers discover and purchase products.

The company combined its shopping assistant Rufus with Alexa+ to introduce Alexa for Shopping. The conversational assistant can recommend products, compare options, monitor prices, and help customers complete purchases.

Amazon said customers who use Alexa for Shopping spend more than 40% more per order than customers who do not use the feature.

Although the long-term impact remains uncertain, AI assistants could influence how consumers search for products and make purchasing decisions.

What This Means for Advertisers

For many years, digital advertising has focused on search engines and social media platforms.

However, AI-powered shopping assistants could gradually change that approach. If consumers increasingly rely on AI recommendations, brands may also need to optimize product information and marketing content for AI-driven discovery instead of focusing only on search rankings or social engagement.

Consequently, marketers may need to adapt their advertising strategies as AI becomes a larger part of online shopping.

Streaming Continues to Support Advertising Growth

Amazon also expanded its media business during the quarter.

Prime Video reported record audiences for NBA and NASCAR programming. In the United States, Game 7 of the NBA Eastern Conference semifinals attracted 6.5 million viewers, while NBA viewership across Europe more than doubled compared with the previous year.

A larger streaming audience gives advertisers additional opportunities to reach customers across Amazon's growing media ecosystem.

Retail Media Strengthens Amazon's Position

Amazon's advertising business benefits from its combination of e-commerce, streaming, and customer data.

Unlike many traditional media companies, Amazon can connect advertising exposure with shopping activity. This allows brands to measure not only how many customers viewed an advertisement but also whether those customers completed a purchase.

As retail media continues to expand globally, Amazon is strengthening its position beyond online retail. At the same time, the company's growing investment in AI suggests that automation will play an increasingly important role in the future of digital advertising.

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