Amazon Has Compelling Margin Upside From Retail Media Network Moat, Bullish Analyst Says

Martin expects’s Retail Media Networks to be the fastest-growing segment of digital advertising over the next two years and that will retain its industry-leading position among all RMNs, with the highest pricing power and profit margins.’s retail media network (RMN) dollars likely come from the shopper marketing TAM of $100 billion globally and $60 billion in the U.S.

The analyst’s channel checks suggest offers best-in-class data for sellers that use its RMN. Specifically, its data tightly links ad spending on its platform to incremental product sales attributable to that ad spending. also gives total product revenues not related to advertising on’s link between ads purchased and incremental products sold (i.e., “closed-loop attribution”) is best-in-class and has been driving’s rapid advertising revenue growth.’s RMN has “closed-loop attribution,” which commands the highest ad CPMs (prices) and offers 70%-90% gross margins, per the analyst. Martin expects to continue to grow faster and win market share.

Marketers’ spending on RMNs follows consumer purchases moving from the physical world toward online e-commerce purchases. Consumer behavior shifts toward purchasing products online drive RMNs revenue growth, and Martin expects this trend to continue for several years.

Cookies deprecation in 2H24 and iOS privacy upgrades in 3Q21 break the historical link between ad spending and sales and create new urgency to find signals that link ad spending to sales. RMNs accomplish this.

Brands want access to a retailer’s first-party data. Brands that use a retailer’s RMN get access to more 1st party data owned by that retailer, accelerating the adoption of RMNs.’s ad revenues were 7% of its net revenue in 2022, up from 2% in 2017. RMN’s gross margins are 70%-90% (BCG). By implication, as advertising revenues rise, this should drive substantial margin expansion at


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