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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
The Drum: You're Not Imagining It: Amazon Really Is a Sea of Ads
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[00:00:00] Kiri Masters: You are not just imagining it. Amazon really is a sea of ads and it still works.
[00:00:08] If you've searched for anything on Amazon lately, you've probably noticed ads are everywhere. Logic would [00:00:15] suggest that ad saturation destroys the shopping experience and causes shoppers to abandon it. But new research from retail media tech provider, Penta Leap shows Amazon now serves an average of over 25 sponsored products per [00:00:30] page load.
[00:00:30] For context, Walmart sits at about 15 to 16 sponsored products per page and the Home Depot manages around 13 most mid-tier retailers have ads that fire on 40 to [00:00:45] 70% of product searches. Amazon has near universal coverage with 99% of searches prompting sponsored placements.
[00:00:55] This is clearly a retail media surface operating at maximum [00:01:00] capacity. So if Amazon can show this many ads without killing the golden goose of consumer demand, why can't everyone else? And what does this tell us about where retail media is headed
[00:01:13] this episode is me [00:01:15] reading from an article that I published for my column at the Drum on December 1st, called You're Not Just Imagining it. Amazon really is a sea of ads. Let's dive in.
[00:01:25]
[00:01:26] Kiri Masters: Amazon's ad load has remained remarkably stable year [00:01:30] over year, shifting only in decimal points according to pen's benchmarking data.
[00:01:35] This indicates that we're witnessing what a fully monetized retail media surface actually looks like. This simply nowhere left to add more traditional. [00:01:45] Sponsored product placements. Andreas Reen, who is the chief executive of Penta Leap, told me in an early interview that this density only works when sponsored products maintain relevance parity with organic listings.
[00:01:59] [00:02:00] Here's what he said. If you go from zero ads to 10 sponsored products on a page, and you track both the margin from your retail business and the margin from your ad sales and the scenario with 10 ads, you make more money. That indicates that you're [00:02:15] doing the right thing. Just as a disclaimer, Pentel was a client of mine in 2025.
[00:02:20] but It isn't enough to just measure clickthrough rate counts too when sponsored products achieve click-through rates comparable to organic results, higher [00:02:30] density is sustainable. When they don't, the entire model collapses is amazon doesn't just show more ads per page than competitors. It also maintains coverage across complex searches. Pentel LEAP's research reveals that Amazon [00:02:45] and Walmart are the only two retailers maintaining high sponsored product coverage on three and four word queries, which is where most networks see coverage collapse.
[00:02:56] This. Here's why that matters. Long tail [00:03:00] searches typically indicate higher purchase intent. A shopper searching for wireless noise canceling headphones under $200 is closer to conversion than someone typing headphones. If your ad tech can't [00:03:15] match relevant products to complex queries, that means you're missing the highest value.
[00:03:20] Advertising opportunities. The difference comes down to targeting methodology retailers offering both keyword based bidding, which is where advertisers [00:03:30] choose specific terms and product-based bidding, which is where retailer determinants placement based on campaign objectives.
[00:03:38] Those retailers can maintain coverage across both the simple and complex searches, whereas [00:03:45] those with less sophisticated systems see sponsored product coverage drop off dramatically. As query complexity increases
[00:03:52] This technical gap contributes to what I have called a doom loop for mid-tier retail media [00:04:00] networks. Without sophisticated matching, ads become less relevant, click-through rate drops and retailers face pressure to either reduce ad load, which sacrifices revenue. Or maintain density despite poor performance, which will [00:04:15] degrade the user experience.
[00:04:17] Amazon avoided this trap by investing early and heavily in its ad tech infrastructure. But Amazon's past to 25 ads per page load didn't come from simply stuffing [00:04:30] more tiles above the fold. They've also added new surfaces for advertisers like product carousels, brand carousels, and video placements throughout the shopping journey.
[00:04:42] This diversity. Of [00:04:45] formats allows Amazon to introduce incremental inventory without overwhelming the shopper with sponsored product ads that all look the same, but more formats also create a more difficult problem keeping relevance high when [00:05:00] ads can come from anywhere. That's the real point of Amazon's unified campaign manager, which the company revealed at unboxed in November.
[00:05:10] By collapsing sponsored product ads and the DSP into [00:05:15] one unified buying system with shared signals, Amazon can make smarter decisions about which format to serve and where to place it. The experience on the page stays coherent to the customer even when. There's [00:05:30] extremely high ad density.
[00:05:32] The simplicity of Amazon's new media buying system is important. At Unboxed, multiple agency executives told me that Amazon's advertising console remains [00:05:45] markedly more accessible than competing DSPs like Google DV 360 or the Trade Desk. This simplicity allows Amazon to tap budgets from advertisers of all sophistication levels, from enterprise brands with dedicated [00:06:00] teams to small businesses running their first digital campaigns. Miracle Ads is the only retail media solution designed for both one P [00:06:15] and three P Marketplace brands. Why does that matter? Marketplace sellers demand a seamless advertiser experience that still offers full funnel ad formats, and retailers need a flexible solution that [00:06:30] allows you to scale your media business.
[00:06:32] Learn more@miracle.com. That's M-I-R-A-K l.com.
[00:06:39]
[00:06:41] Kiri Masters: Now let's talk about the economics of abundant [00:06:45] inventory. Amazon's high add density creates a counterintuitive economic effect, which is that more supply moderates, CPC inflation data from ad tech companies. Sky backs this up.
[00:06:59] Total [00:07:00] ad spend on Amazon and clicks each jumped 23% year over year through to the third quarter of 2025. Yet CPCs nudged up just 1% over the same period.
[00:07:12] That isn't what a constrained auction looks like. It's [00:07:15] the signature of a platform absorbing demand by expanding supply. This mirrors what other ad platforms like Google have achieved by consistently expanding available ad space on results pages. Google created [00:07:30] surplus inventory that moderated price increases
[00:07:33] while driving overall revenue growth through volume,~ While driving overall revenue growth through volume,~
[00:07:36] ~Amazon CPCs have riv. Amazon's CPCs has. Okay. ~Amazon's CPCs have risen year over year, but far less dramatically than they would have if inventory remained [00:07:45] constrained for other retailers Watching Amazon's success, this creates an uncomfortable choice. Many of them entered retail media with expectations of 70 to 80% profit margins on sponsored product ads.
[00:07:58] Margins that require [00:08:00] constrained inventory. And high CPCs. Amazon proved you can make more total revenue with abundant inventory and moderate pricing, but that requires technical sophistication that most retailers currently [00:08:15] lack.
[00:08:15] So what this means for everyone else, for retailers still scaling, sponsored product coverage. Amazon saturation offers both a blueprint and a warning. The blueprint is high ad density can work if relevance holds. [00:08:30] The warning is you need sophisticated ad tech to maintain relevance at scale
[00:08:35] And for brands and agencies navigating this landscape, it's long been obvious that Amazon isn't going to reduce ad inventory. If anything, we can expect [00:08:45] more formats and ad types as the company pursues new surfaces and placements ~is the Amazon playbook within reach to other retailers.~
[00:08:50] ~Oh, let's just scrap that sentence. ~25 ads per page would've broken most retail experiences, but on Amazon, it's just a regular Tuesday.
[00:08:59]