Advertisers may be pulling back – just not from Amazon
By Krystal Scanlon • May 2, 2025 •
Ivy Liu
Some companies just don’t lose – even when the market is in free fall. Amazon’s ads business is proof, cruising steadily while the broader market sputters in the face of economic drag.
That strain has already forced ad spend forecasts down as CMOs scramble to rework budgets and reallocate dollars in the thick of the turbulence. Unsurprisingly, more of that money is ending up in Amazon’s cart, where ads are close to the point of purchase – easier to justify, harder to cut.
Over the last quarter, it raked in $13.92 billion, a 19% rise on the same period a year ago, according to its latest earnings update.
“We’re seeing strength across our broad portfolio of full funnel advertising offerings that help advertisers reach an average ad supported audience of more than 270 5 million in the US alone, this includes our top of funnel efforts to drive brand awareness,” Amazon CEO Andy Jassy told analysts on the company’s earnings call yesterday. “We continue to see a lot of opportunity to further expand our full funnel capabilities for brands.”
The numbers and commentary only confirm what media buyers have been hinting at all year: Amazon’s on track for a big 2025. It might still be behind rivals in share of wallet but it’s fast becoming the fastest-growing line on media plans – and the hardest one to leave off.
According to six ad execs that Digiday caught up with, the majority of their clients are spending more on Amazon’s demand-side platform (DSP) this year, as it seems to be a surefire way to see them through the economic uncertainty. Even Amazon has pitched them the same message.
Basis Technologies’ group vp, search media solutions Robert Kurtz told Digiday that while the Amazon DSP spend his team managed for clients was relatively low last year, growth rates for 2025 are already high.
“We’re seeing an increase in the number of individual brands spending on the platform by 400%, while spend increase year-to-date is 3,000% higher than this time last year,” he said, without providing exact dollar figures. “Almost all of these spenders are new to the platform this year, and none of them have indicated that they would pull dollars because of recent tariff events.”
It’s a similar story for Power Digital clients, which include drinkware brand Corkcicle and keto-friendly snack and cereal brand Catalina Crunch. The company’s director of retail marketing, Katie Davis said that amid economic uncertainty, their clients are “doubling down” on performance-driven channels driving omnichannel success and Amazon DSP is delivering.
“From the start of 2025, Amazon DSP investment is up 45%, with per-brand spend rising 36% since the new year,” she added, though she didn’t provide specifics.
It’s tough to gauge just how impressive these increases are without real dollar figures. Still, whatever’s being spent, it’s not pocket change. Amazon’s DSP usually demands a $50,000 minimum, and agencies tell Digiday that even the self-serve route works best with a solid $25,000 behind it.
These kinds of commitments will matter, especially as even Amazon isn’t immune to pullbacks from smaller advertisers feeling the pinch of new tariffs on Chinese goods.
As eMarketer’s principal analyst Sky Canaves put it: “Amazon will have to bolster ad commitments from larger and non-endemic advertisers via channels like Prime Video to offset this trend.”
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Amazon hasn’t entirely won the industry over just yet, but its firmly on media buyer’s radar. That much is clear from Tinuiti’s latest Q1 2025 digital advertising benchmark report, which collated anonymized performance data from the agency’s ad spend on behalf of clients.
According to the report, spend on the Amazon DSP rose 12% year over year for Tinuiti’s advertisers that were active throughout Q1 2024 and Q1 2025. While well more than half (57%) of all Amazon DSP spend went to inventory on pages owned and operated by Amazon, such as Amazon’s website and app, as well as other sites and apps like IMDb.
Even those ad execs who have experienced some issues, either with the platform or more broadly with the economic climate, aren’t turning their back on the DSP.
“From Q4 2024 to Q1 2025, there were issues with pacing in the Twitch and STV inventory,” said Kyle Knutsen, director of digital video at Rain the Growth agency. “We’ve seen these issues become mitigated over time, allowing for more predictable spends in Q2 of this year.”
Similarly, Josh Glenn, vp, commerce and retail media at MindgruveMacarta said that pacing implications have varied depending on each of his client’s exposure to tariff challenges, making it difficult to identify a clear overall trend.
“Some clients are staying the course with their Q1 plans, while others have pulled back,” he said.
https://digiday.com/?p=577503
