Amazon ad revenue hits $19.8B as AI Sponsored Prompts drive growth

Amazon’s results confirm the growing market shift toward retail media networks that provide deterministic, closed-loop attribution. While Google and Meta rely on modeled intent, Amazon’s direct link to purchase data allows for high-premium pricing and better ROAS during economic uncertainty. Within the streaming ecosystem, this infrastructure increasingly fuels Prime Video’s ad-supported tier, which now scales using the same conversion-centric data. Marketers should watch the general availability of Sponsored Prompts as a signal that conversational AI is transitioning from an experimental feature to a core, monetized performance driver across Amazon's entire commerce and video stack.

The expansion of Amazon's advertising business is increasingly tied to its dominance in ad-supported streaming. At its unBoxed 2025 event, Amazon revealed that Prime Video’s ad-supported tier reached 315 million monthly viewers globally, up from 200 million in early 2024, per The Wrap and MediaPost in November 2025. This rapid scale was achieved by making advertising the default experience for Prime members, with only an estimated 10% of users paying a $2.99 monthly fee to opt out of ads, according to AdWave in January 2026. This massive reach has allowed Amazon to compete directly for linear television budgets, with MoffettNathanson estimating Prime Video ad revenue will exceed $2 billion in 2025.

Beyond video, Amazon is leading a broader "third wave" of digital advertising known as retail media. Per Digital Applied and Fugo in April 2026, global retail media spend is projected to hit $62 billion this year, driven by the decline of third-party cookies and a shift toward first-party purchase data. Amazon, along with Walmart and Instacart, currently controls 78% of this category. In Q2 2026 alone, Google’s advertising revenue reached $81.6 billion and Meta’s hit $59.4 billion, according to The Keyword in July 2026. While Amazon remains the third-largest player, its 26% growth rate significantly exceeds the roughly 12% growth seen at Google, indicating a continued consolidation of performance-based ad dollars.

Technologically, Amazon is aggressive in moving AI from creative tools to campaign management. The Sponsored Prompts feature, which moved to general availability in March 2026, acts as a virtual product expert within ads, answering shopper questions in real-time, per CedCommerce. CEO Andy Jassy also noted the success of the NBA and Thursday Night Football partnerships, where ad inventory has consistently sold out. This integration of live sports and AI-driven performance metrics is central to Amazon's strategy to maintain double-digit growth even as the broader digital ad market is forecast to slow to 5% by 2026, according to Dentsu.