In the second quarter of 2026, Amazon’s advertising revenue grew 26% year over year to $19.8 billion. Its online stores grew 15%, according to Amazon’s results as summarized by EcomCrew. Advertising is now growing nearly twice as fast as the retail business it sits on.
That single gap explains most of what is happening on Amazon this year. Visibility costs more, discovery is shifting to AI, Amazon is automating its own ad tools, and brands are asking harder questions about what they pay their partners for.
This article covers both sides of that change: the growth trends reshaping Amazon in 2026, and the expectations brands now bring to the agencies, platforms and teams that manage their Amazon business.
Part 1: The growth trends shaping Amazon in 2026
Trend 1: Advertising is growing faster than retail
Sources: Amazon Q2 2026 earnings call, EcomCrew and Yahoo Finance. Advertising growth also accelerated after four quarters at around 22%, according to Levelheaded Investing.
Two caveats matter when reading these numbers. Prime Day fell in Q2 this year, and paid units grew 17%, according to Levelheaded Investing. Even so, advertising outpaced retail on every measure.
EcomCrew’s analysis of the results estimates Amazon earned about 8% more advertising revenue per paid unit, while seller services revenue per third-party unit rose only about 1%. For sellers, the cost of being seen is rising faster than the cost of being sold.
Andy Jassy said Sponsored Products remains Amazon’s largest ad offering and a key growth driver (Amazon Q2 2026 earnings call). Search ads are still the core of Amazon advertising, but they are getting more expensive.
Trend 2: Discovery is moving into AI conversations
On May 13, 2026, Amazon launched Alexa for Shopping in the US, folding its Rufus shopping assistant into Alexa+ across Amazon.com, the Shopping app and Echo devices (Adweek, Flipflow). On the Q2 call, Jassy said more than 350 million customers had used Alexa for Shopping in the previous 12 months, as reported by Levelheaded Investing. He also noted:
“increasingly more shoppers are discovering products in our agentic and conversational experiences”
— Andy Jassy, President and CEO, Amazon
Source: Amazon Q2 2026 earnings call
These AI surfaces are not ad-free. An Amazon spokesperson confirmed to Adweek that Alexa for Shopping is supported by sponsored ads and prompts. At unBoxed 2026, Amazon announced Branded Conversations, an ad format that lets brands explain what sets their products apart inside Alexa for Shopping, clearly labelled as sponsored (Chain Store Age). B&T reports it is due to launch in the US in January (B&T).
Listings now need to answer questions, not just contain keywords. Our guide to how Amazon’s search algorithm works explains why.
Trend 3: Amazon is automating its own ad platform
At unBoxed 2026, Amazon renamed its unified ad platform Amazon Ads Agent. It replaces the Ads Console, which launched in 2012, and the Amazon DSP experience with an AI-first platform and conversational chat (B&T, eMarketer).
- Three campaign types: Sponsored Ads, Full-Funnel Campaigns, and Display, Video and Audio (DVA+)
- Advertisers can build campaigns manually, let Amazon’s AI optimize, or mix both
- DVA+ brings programmatic display, Sponsored TV and video under one format, with DVA+ in closed US beta before wider rollout
Amazon’s creative agent is already producing measurable results. In a Q2 2026 pilot, AI-generated assets delivered an 18-point increase in detail page view rate, a 14% reduction in cost per detail page view and a 10-point lift in branded search rate versus traditionally produced assets (Marketing Dive).
Kelly MacLean, Vice President of Engineering, Science and Product at Amazon Ads, framed the shift this way:
“Rapid advancements in AI are allowing us to deliver better advertising”
— Kelly MacLean, Vice President, Engineering, Science and Product, Amazon Ads
Source: exchange4media
Marketers are moving in the same direction. Epsilon data cited by eMarketer shows 43% of US marketers have already integrated agentic AI into workflows, with another 49% piloting it (eMarketer).
Trend 4: Shopping agents reach beyond Amazon
Alexa for Shopping includes Buy for Me, which can complete purchases on other retailers’ websites from inside the Amazon app, alongside Shop Direct, which surfaces third-party shops within Amazon (Flipflow). Brands now have to think about how AI assistants describe and recommend their products, not just how they rank in a search grid.
Trend 5: Costs and supply chains are under pressure
In Jungle Scout’s State of the Amazon Seller 2025, rising costs ranked among the top challenges for sellers, and fewer businesses were sourcing from China while sourcing from the US nearly doubled (Jungle Scout). Combined with rising ad revenue per unit, that puts margins squarely in focus for 2026.
Trend 6: Budgets are tight, and retail media is still gaining
WARC’s Voice of the Marketer survey of more than 1,000 marketers found that only 19% expected budgets to rise in 2026, even though 59% expected business to improve. Marketers expecting lower budgets were more likely to invest in performance marketing than brand marketing, and a third expected to increase investment in retail media (WARC).
Brands are not cutting Amazon. They are demanding more from every dollar they put into it.
Trend 7: The seller base is professionalizing
More than 60% of sales in Amazon’s store come from independent sellers, and more than 55,000 of them passed $1 million in annual sales, according to Amazon’s 2024 Small Business Empowerment Report as reported by Small Business Trends. Competitors are increasingly well-funded businesses with dedicated teams, tools and partners, which raises the bar for everyone else.
Part 2: What clients now expect from their Amazon partners
Those trends are changing what brands ask of their agencies, consultants and platforms. Six expectations stand out in 2026.
Expectation 1: Pricing tied to outcomes, not hours or ad spend
A 2026 report from the World Federation of Advertisers and Agency Mania Solutions, covering 69 multinationals with $147 billion in combined marketing spend, shows how far this has moved (Marketing Report):
Laura Forcetti, Director of Global Marketing Sourcing at the WFA, summarized the direction:
“The future of agency compensation is not paying for effort”
— Laura Forcetti, Director of Global Marketing, Sourcing, WFA
Source: Marketing Report
The shift is still early. Between 67% and 80% of respondents say performance-based pay makes up less than 20% of total agency compensation in most disciplines, but adoption is highest in media, where outcomes can be tracked most directly. Amazon advertising is about as measurable as media gets, which is why outcome-focused pricing is arriving here first.
On Amazon, this has a specific meaning. A fee that rises with ad spend rewards spending more, at the very moment ad costs per unit are rising. Brands increasingly expect flat or outcome-linked fees and full visibility into what they are paying for. Our Amazon agency pricing guide compares the models.
Expectation 2: AI that shows up in results, not just in the pitch
Clients now assume their partners use AI. Forrester’s 2026 brand and communications research found that more than half of B2B marketing leaders rate data strategy and AI readiness as important agency selection criteria, but only a small share are satisfied with agencies’ ability to deliver (Forrester).
AgencyAnalytics’ 2026 benchmarks add that 30% of agencies say clients perceive their services as costing less, likely because they assume AI should reduce fees (AgencyAnalytics). With Amazon Ads Agent automating parts of campaign execution, brands will ask a pointed question: what does my partner do that Amazon’s own AI does not?
Agencies feel the pressure. In WARC’s survey, 40% of agencies said they feel threatened by AI, compared with 30% of brand marketers, who are using AI to become more independent (WARC). A Modern Retail+ Research survey found 38% of agency professionals named the effects of AI as the industry’s biggest challenge in 2026 (Modern Retail). Forrester also found the share of marketers expecting to increase overall agency budgets fell 13 percentage points from 2025 to 2026.
The answer they expect is strategy, coordination and accountability: connecting ads to inventory, pricing, listings and profit in ways a platform tool does not on its own.
Expectation 3: Full-funnel thinking, not Sponsored Products alone
Amazon is packaging its formats into Full-Funnel Campaigns and DVA+. In Pacvue’s Q4 2025 EU and UK benchmark, Sponsored Brands grew faster than Sponsored Products and showed stronger conversion and return trends, while Amazon DSP budgets increased sharply (Pacvue).
Brands expect partners to plan across search, brand, display, video and streaming, and to explain what each format contributes. Our guide to the types of Amazon ads outlines the options.
Expectation 4: Profit and total growth, not platform metrics
AgencyAnalytics reports that with tighter budgets, brands are looking at the full picture, such as marketing efficiency ratio, blended performance and how channels work together, rather than isolated platform metrics (AgencyAnalytics).
On Amazon, that means TACoS, total sales, contribution margin by product and new-to-brand customers, not ACoS alone. Our guide to monitoring Amazon ads performance covers the metrics that matter.
Expectation 5: Readiness for AI discovery
With hundreds of millions of shoppers using Alexa for Shopping and sponsored prompts appearing inside it, brands expect their partners to optimize listings for question-based discovery and to have a view on new formats like Branded Conversations. Nearly half of agencies (48%) admit they struggle to track users who discover brands through AI tools (AgencyAnalytics), so partners that can measure AI-driven discovery have a real advantage.
Expectation 6: Clear briefs, trust and senior attention
The WFA research found that 35% of brands say managing agency relationships has become harder, citing more stakeholders, complex scopes, shorter timelines and higher expectations on data, technology and transparency. Great briefing scored 5.6 out of 6 as a contributor to agency performance, ahead of respect and trust at 5.2 and financial incentives at 3.9 (Marketing Report).
Relationships are also lasting longer: average paid social agency tenure rose from two years to 4.3 years since 2018. Brands are willing to stay with partners who communicate clearly and stay accountable.
What this means for in-house Amazon teams
The same trends apply to brands managing Amazon themselves. Amazon Ads Agent lets advertisers build campaigns manually, hand optimization to Amazon’s AI, or combine the two, and eMarketer’s recommendation is to test agentic tools with human oversight and clear guardrails (eMarketer).
- Skills are shifting from manual bid changes towards goal setting, guardrails and interpreting AI-driven results.
- Content matters more, because listings and creative feed both AI shopping assistants and Amazon’s creative and targeting tools.
- Measurement needs updating to capture discovery that starts in conversations rather than a search bar.
- Coordination is the hard part: ads, inventory, pricing and listings still sit in different hands in most businesses.
Our guide on using Claude for Amazon sellers and our overview of Amazon workforce changes with AI look at how teams are adapting.
Part 3: How to evaluate an Amazon partner in 2026
Our checklist of what a brand needs before hiring an Amazon agency goes deeper.
How Xneeti is built for these expectations
Xneeti is a multi-marketplace AI platform built by ex-Amazon category managers and ex-Google engineers. It was designed around the expectations above:
Across 80+ managed accounts, Xneeti averages a 50% TACoS reduction and 30% revenue growth, with a 4.8 rating on Google from 120+ reviews.
See our Amazon PPC services, our full-service Amazon agency model, or book a demo.
