Dive Brief:
- Amazon’s revenue generated from advertising rose 22% year over year to $15.7 billion in Q2 2025, per an earnings statement. The revenue figure beat Wall Street expectations.
- Executives highlighted developments around the retailer’s demand-side platform (DSP) and its recent deal with Roku around connected TV (CTV), while signaling that Alexa+ could eventually offer advertising opportunities.
- The company said that it hasn’t yet seen diminishing demand nor meaningful appreciation in prices due to tariffs, but noted the possible impact of recessionary fears on its Q3 guidance.
Dive Insight:
Amazon’s ad business continues to grow at a rate that exceeds that of its core retail business, which saw net sales increase 13% to $167.7 billion in the quarter. The company helps advertisers reach an average ad-supported audience of more than 300 million consumers in the U.S. through full-funnel offerings that include its retail marketplace, Prime Video, Twitch and — increasingly — its DSP.
“Our trillions of proprietary browsing, shopping, and streaming signals paired with extensive supply side relationships and our secure clean rooms provide advertisers the ability to optimize advertising, deliver greater precision, and drive efficient and effective advertising outcomes,” CEO Andy Jassy said of the DSP on an earnings call.
Along with revamping the DSP user experience in October, Amazon in June integrated it with Disney’s Real-Time Ad Exchange (DRAX), allowing advertisers to leverage insights from both companies. Amazon last month also partnered with Roku to offer advertisers using its DSP what the companies claim is the largest authenticated CTV footprint in the U.S., a partnership Jassy called “momentous.”
“It’s a giant leap forward for advertisers bringing best in class planning, audience precision, and performance to TV advertising,” the executive said.
Amazon has continued to build out its advertising ecosystem, unveiling artificial intelligence-powered contextual ads at its second annual upfront in May, partnering with InfoSum and Magnite around data and widening access to AI tools for advertisers.
For its retail business, Amazon expects Q3 net sales to be between $174 billion and $179.5 billion, a wide range that takes into consideration a macroeconomic environment that continues to be effected by President Trump’s moves around tariffs. The company’s guidance around operating income in Q3 was lower than analysts expected. Executives noted that it is still too early to see how tariffs will settle and who will absorb the costs.
“In the first half, we just haven’t seen diminished demand and we haven’t seen any kind of broad scale [average sale price] increases. And, you know, so that could change in the second half. There are a lot of things that we don’t know, but that’s what we’ve seen so far,” Jassy said.
