Amazon video ads are rapidly transforming the retail media landscape, creating unprecedented opportunities for brands. Amazon’s advertising revenue grew until the year 2025, outpacing major competitors like Meta and Google.
This surge demonstrates how retail media networks are becoming a dominant force, now representing $196 billion globally. Amazon’s leadership in this space reflects the value of leveraging owned platforms, such as Alexa, which enable brands to reach highly engaged audiences directly.
For marketing leaders and executives, understanding the retail media explosion is critical. Traditional digital channels rely heavily on third-party data and cookies, but Amazon’s ecosystem provides first-party insights that accurately reflect consumer intent.
This direct access to purchase behavior allows advertisers to optimize campaigns, reduce wasted spend, and achieve stronger ROI.
By integrating video ads into platforms like Fire TV, Prime Video, and Echo Show, brands can capture attention at multiple points along the customer journey.
Companies are shifting investments toward these high-intent channels because the measurable impact on conversions and revenue is clear. Alexa and other Amazon-owned platforms offer interactive, shoppable ad experiences, allowing users to engage immediately with products.
This combination of scale, targeting precision, and engagement potential makes Amazon video ads a cornerstone of any modern retail media strategy.
Understanding this growth is also about recognizing trends in consumer behavior. Shoppers increasingly interact with devices like the Echo Show for recommendations, media consumption, and product discovery.
By aligning advertising strategies with these behaviors, brands can deliver relevant messages in context, enhancing engagement and conversion rates.
As the retail media ecosystem continues to expand, early adopters who optimize campaigns across Amazon video ad surfaces will gain a significant competitive edge in both revenue growth and brand visibility.
In this article, we will explore how Alexa video ads work, the latest Amazon Ads updates, dynamic segmentation, DSP and display strategies, creative best practices, and the future of voice and video commerce, providing a complete guide for brands looking to capture this $196 billion opportunity.
How Alexa Video Ads Work and Why They Matter
Alexa video ads stream seamlessly across Amazon’s ecosystem, appearing on devices such as Prime Video, Fire TV, and Echo Show.
These ads are designed to engage viewers through a combination of visual storytelling, interactive elements, and voice-activated calls-to-action.
Unlike traditional digital ads, Alexa video ads allow users to respond naturally using their voice, enabling immediate product exploration or purchases without leaving the platform.
The true power of Alexa video ads lies in Amazon’s unparalleled first-party data. Brands can leverage insights from browsing history, purchase behavior, and user preferences to deliver highly relevant, personalized ads.
This data-driven targeting ensures that each ad reaches consumers who are actively considering similar products, increasing the likelihood of conversion. Voice integration further enhances engagement, allowing users to request more information, add items to their cart, or even make a purchase with simple commands.
Early adoption by leading consumer packaged goods and home technology brands demonstrates the potential of shoppable Alexa video ads.
These brands have successfully tested interactive formats that encourage users to engage directly from their smart speakers or connected TVs.
The results highlight improved engagement metrics and higher conversion rates compared to standard display or video ads. By reaching audiences in the moments when they are most receptive, marketers can deliver a seamless and convenient shopping experience.
Integrating Alexa video ads into your retail media strategy provides a dual benefit: it combines precision targeting with an innovative user interface. Brands can capitalize on both intent-driven and impulse-driven purchases, ensuring their messaging reaches audiences with maximum efficiency.
As smart speaker usage and streaming device adoption continue to grow, leveraging Alexa video ads becomes essential for marketers aiming to stay ahead of competitors and capture the full potential of Amazon’s expanding ecosystem.
November 2024 Updates: What Changed for Amazon Video Ads
Amazon Ads introduced significant updates in November 2024 designed to enhance video ad performance across its ecosystem. One of the most notable additions is the Alexa Video Supply Source within Amazon DSP.
This new supply source gives advertisers access to a broader range of inventory, including placements on Echo Show, Fire TV, and other connected devices, providing more opportunities to reach engaged audiences.
Another major improvement is Dynamic Segments, which allows for smarter audience grouping based on real-time behavior and purchase intent. Advertisers can now target highly specific groups without manually creating multiple segments, making campaigns more precise and reducing wasted spend.
Additionally, contextual keyword targeting has been added to DSP inventory, enabling brands to place ads alongside content that matches their messaging, further increasing relevance and engagement.
For marketers planning 2025 campaigns, these updates are critical. Leveraging the new inventory sources and smarter targeting tools allows advertisers to reach audiences more effectively and maximize ROI.
Campaign strategies should focus on integrating these features to improve both reach and performance. By embracing these updates early, brands can gain a competitive advantage, ensuring their video ad campaigns are not only visible but also highly impactful and measurable.
Dynamic Segments Explained: ML-Powered Amazon Video Ads Targeting
Dynamic Segments represents a major shift in how advertisers target audiences on Amazon. Powered by Amazon’s machine learning engine, this feature analyzes a wide range of data points in real time, including purchase behavior, demographics, and intent signals.
By understanding audience behavior at a granular level, Dynamic Segments allows brands to deliver highly relevant video ads to users most likely to engage and convert.
Dynamic Segments also enable timely and contextually relevant messaging. Brands can show video ads that resonate with a user’s current needs or interests, increasing the chances of conversion.
For example, a home technology brand can serve an Alexa video ad highlighting a new smart device to a user who recently searched for connected home products. This ML-driven targeting ensures that campaigns are not only precise but also adaptive, continuously learning from real-time interactions to optimize performance.
By incorporating Dynamic Segments, marketers can make Alexa video ad campaigns more strategic, reducing inefficiencies and maximizing engagement.
This approach ensures that every ad dollar is invested in reaching audiences who matter most, setting the stage for higher ROI and more scalable results in 2025 and beyond.
Beyond Product Listings: Amazon DSP and Display Strategies That Scale
Relying solely on Sponsored Products is no longer sufficient. Combining Amazon DSP with display advertising allows marketers to reach mid-funnel audiences off-platform. A structured full-funnel approach includes:
- Awareness campaigns to introduce products to new audiences
- Consideration campaigns that engage shoppers with content or offers
- Conversion campaigns to encourage purchase decisions
DSP and display strategies amplify reach while maintaining targeting precision. This ensures brands deliver messages at the right stage of the buyer journey, optimizing spend and improving overall campaign ROI.
The First-Party Data Advantage for Amazon Video Ads
Amazon’s first-party data gives advertisers a measurable edge in performance and targeting accuracy. Unlike cookie-based systems that rely on third-party tracking, Amazon leverages verified purchase behavior, search intent, and real-time engagement data from millions of users across its ecosystem.
This deep behavioral insight enables marketers to reach audiences who are actively browsing or ready to buy, rather than relying on assumed interests.
For instance, Mars, a global snack brand, used Amazon Marketing Cloud insights to refine its targeting strategy and achieved outstanding results: a 90% increase in ROAS, a 26% reduction in cost per mille (CPM), and a 42% new-to-brand rate among variety shopper segments.
These results prove that Amazon’s first-party data not only enhances targeting precision but also reduces ad waste, driving stronger brand loyalty and measurable ROI.
Compared to Meta or Google, where targeting is limited by privacy restrictions, Amazon’s ecosystem continues to deliver intent-driven, privacy-safe advertising that translates directly into conversions and long-term growth.
Campaign Structures That Work: TACoS Optimization
TACoS, or Total Advertising Cost of Sale, measures total ad spend relative to overall revenue. Optimizing TACoS ensures campaigns scale profitably while maintaining efficiency. By integrating DSP campaigns with Sponsored Ads, brands can reduce TACoS and maximize ROI. Steps to optimize TACoS include:
- Analyze historical spend and sales to set a benchmark
- Segment campaigns by funnel stage for efficiency
- Continuously monitor performance and adjust budgets
TACoS optimization ensures ad investments deliver maximum return and aligns campaigns with long-term growth goals.
Creative Best Practices for Amazon Video Ads
The creative approach of Amazon video ads heavily influences conversion rates. Brands should focus on storytelling, product focus, and clear calls-to-action. Creative principles include:
- Mobile-ready layouts for Fire TV and Echo Show
- Sound cues or voice prompts to increase engagement
- Highlighting product benefits visually and emotionally
Integrating Alexa voice prompts allows users to interact instantly, improving conversions. High-performing brands design creative assets that capture attention quickly while driving measurable actions.
Amazon Marketing Cloud: Advanced Analytics for Smarter Decision
Amazon Marketing Cloud, or AMC, provides insights across campaigns for better decision-making. Brands can analyze multi-touch attribution, audience behavior, and campaign impact across channels.
Using AMC, retailers have reduced wasted ad spend by 80% in real-world cases. AMC helps marketers uncover hidden insights that are not visible in standard dashboards. Leveraging AMC ensures campaigns are optimized based on actionable, data-driven intelligence.
Integration Strategy: Amazon + Google + Meta
While Amazon video ads are powerful, omnichannel strategies amplify results. Brands can retarget Amazon audiences through Google Display and Meta Ads to reinforce messaging. Coordinated campaigns create a seamless buyer journey across platforms, increasing conversions. A practical approach includes:
- Synchronizing ad messaging and creative
- Retargeting high-intent users off Amazon
- Tracking results across channels for attribution
Cross-platform integration ensures Amazon video campaigns reach audiences multiple times, improving overall effectiveness and ROI.
Budget Allocation Framework for Amazon Video Ads
Effective budget allocation for Amazon video ads requires strategic distribution across ad types that align with business size, objectives, and campaign maturity.
According to industry insights, brands should consider dividing their budgets between Sponsored Ads and DSP campaigns based on campaign goals and resource availability. For example:
- Early‑stage brands may lean more heavily toward Sponsored Ads to drive conversions quickly and reliably.
- Mid‑sized brands could allocate substantial spend toward DSP campaigns for reach and brand awareness while maintaining Sponsored Ads for performance.
- Enterprise‑level brands may balance budgets more evenly across both approaches as part of a full‑funnel strategy.
While there is no one‑size‑fits‑all distribution publicly specified by Amazon, industry guidance shows the trend is shifting toward allocating a meaningful portion of the budget to Amazon DSP in addition to Sponsored Ads.
Amazon’s own materials highlight that DSP enables access to premium supply and first‑party signals for higher‑precision targeting.
To apply this framework:
- Review your past performance by ad type (Sponsored Ads vs. DSP) and assess which delivered stronger ROAS or brand lift.
- Set budget tiers according to business size (small, medium, large) and growth phase.
- Monitor spend and performance weekly, and reallocate toward the highest‑return ad type over time.
- Create a flexible planning model that allows you to increase DSP investment as you scale and maintain Sponsored Ads for conversion efficiency.
By following a data‑led budget allocation framework, marketers can optimize reach, performance, and ROI in the evolving Amazon video advertising ecosystem.
Case Study: 26.8 % Growth in Amazon DSP Campaigns
In 2024, a leading consumer electronics brand achieved a remarkable 26.8 % campaign lift by incorporating Alexa video ads into its Amazon DSP strategy.
This success demonstrated how a well-executed, data-driven approach can unlock new levels of engagement and revenue growth within Amazon’s advertising ecosystem.
The brand’s strategy focused on combining Dynamic Segments with creative storytelling and full-funnel optimization. Dynamic Segments allowed Amazon’s machine learning technology to analyze audience behavior and intent in real time, automatically identifying high-value consumers.
This reduced manual work and improved precision in ad delivery. By allowing machine learning to guide audience discovery, the brand ensured that each impression reached users most likely to convert.
In parallel, the creative direction focused on emotional storytelling and user relevance. Every video ad included a strong narrative and a clear call to action, ensuring that audiences not only watched but also interacted.
The campaign ran across multiple surfaces, including Alexa video placements, Sponsored Ads, and Amazon DSP display inventory. This cross-platform presence helped build consistent brand visibility and fostered trust at every stage of the consumer journey.
The results were clear. The brand reported a higher return on ad spend, improved engagement rates, and a significant lift in conversions. Customer retention also grew as the brand maintained visibility through personalized follow-up campaigns powered by Amazon’s first-party data.
Key lessons from this campaign show that successful Alexa video ad strategies require precision, creativity, and integration. Brands should focus on:
- Using data-driven targeting through Dynamic Segments for improved efficiency.
- Building strong narratives that emotionally connect with audiences.
- Leveraging Amazon’s first-party insights to refine targeting.
- Maintaining a seamless flow between Sponsored Ads and DSP campaigns for holistic growth.
This case proves that Amazon DSP, supported by Alexa video ads and intelligent targeting, offers one of the most effective pathways to measurable advertising success in 2025 and beyond.
The 2026 Opportunity: Future of Voice and Video Commerce
The future of Amazon video ads lies at the intersection of video commerce, AI personalization, and voice search. As Alexa continues to evolve, users will experience a new form of advertising that is both interactive and effortless. Consumers will soon be able to watch a video ad, speak a simple command, and complete a purchase instantly — all within the same ecosystem.
According to Statista, global retail media spending is expected to exceed $136 billion by 2026. This growth represents a major opportunity for brands that embrace Alexa’s evolving advertising capabilities early. With voice-enabled shopping already gaining popularity, marketers who adopt video and voice commerce will position themselves at the forefront of this transformation.
AI-driven personalization will play a central role in this future. Amazon’s data and machine learning technology will allow brands to deliver video ads tailored to each user’s interests, purchase history, and context. Voice-enabled calls to action, such as “Alexa, add to cart” or “Alexa, show similar products,” will make shopping faster and more intuitive than ever before.
To prepare for this shift, brands should begin integrating these principles into their marketing frameworks:
- Adopt video commerce strategies that merge storytelling with interactivity.
- Use artificial intelligence to deliver highly personalized ad experiences.
- Incorporate voice-based engagement triggers into creative design.
- Monitor performance across video, voice, and commerce touchpoints for consistent optimization.
The 2026 landscape will favor brands that understand how to balance technology with human behavior. Those who act early will not only capture market share but also set the standards for the next generation of retail media.
Conclusion: Your Next Move in the Alexa Advertising Era
Amazon Alexa video ads represent the next major evolution in retail media, bringing together video, voice, and data into a single performance-driven ecosystem. This unique combination enables brands to connect with high-intent audiences at the right moment, transforming engagement into measurable growth.
By uniting creative storytelling, AI-powered targeting, and first-party insights, advertisers can maximize campaign performance and minimize wasted spend. Early adoption is key, as brands that begin investing in Alexa video ads today will gain a long-term competitive advantage as the platform matures.
Success in this space requires strategic thinking, technical expertise, and the ability to blend creativity with precision. This is where working with the right partner becomes crucial.
[A] Growth Agency helps brands build end-to-end Amazon advertising strategies that deliver real, measurable results.
Our Amazon Growth Framework combines data analytics, creative optimization, and conversion-focused planning to help you scale smarter and faster.
If your brand is ready to lead in the era of Alexa advertising, now is the time to act.
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