Amazon's advertising revenue grew 26% in Q2 2026. Retail media overall grew at almost the same rate, nearly three times the growth forecast for the entire US ad market this year. That's not a coincidence working in advertisers' favor. Durable demand for a supply of ad inventory that isn't growing nearly as fast has exactly one predictable effect on price.
Faster each quarter, not slower.
Amazon's advertising revenue reached $19.8 billion in Q2 2026, up 26% year-over-year, accelerating from $17.24 billion and 22% growth in Q1. The growth is not evenly spread across formats: Prime Video ad spend grew an estimated 71% year-over-year in Q1 2026, after 127% growth the quarter before, making Streaming TV, now consolidated under a single Streaming TV offering spanning Prime Video, Fire TV, Twitch, and open-internet CTV, Amazon's fastest-growing ad channel. Amazon DSP spend was up an estimated 41% year-over-year in the same window.
Year-over-year growth by area. Overall ad revenue is up 26%, but DSP and Streaming TV are climbing far faster.
Broader than Amazon alone, but Amazon and Walmart are capturing almost all of the new money.
Retail media as a category grew roughly 26% year-over-year in Q2 2026, with clicks up 27%, according to Skai's Q2 2026 Quarterly Digital Marketing Trends Report, a rate close to Amazon's own ad-revenue growth, meaning this is not an Amazon-only phenomenon. Walmart Sponsored Products spend was up an estimated 62% year-over-year in Q1 2026, even faster than Amazon's own Sponsored Products growth of roughly 21% in the same benchmark. Retail media overall now represents close to 30% of all US digital ad spend, up from roughly 15% in 2022, and Amazon and Walmart together are projected to capture 89% of all incremental retail media dollars in 2026. The growth is real and broad-based, but it is concentrating into two platforms.
Sponsored Products spend growth, year-over-year, Q1 2026. Walmart is outpacing Amazon's own Sponsored Products growth.
Amazon and Walmart together are projected to capture 89% of all incremental US retail media dollars in 2026.
Retail media is growing roughly three times faster than advertising as a whole.
The IAB's 2026 Outlook Study, based on more than 200 brand and agency buyers surveyed between November 2025 and January 2026, forecasts 9.5% growth in total US ad spend this year, moderating to 7.1% to 7.8% excluding major cyclical events. Retail media's roughly 26% growth rate is nearly three times that pace. That gap is the entire story: money is moving out of slower-growing channels and into a fixed, contested pool of retail media impressions faster than that pool is expanding.
Year-over-year growth: retail media versus the total US ad market forecast for 2026.
Rising CPCs and a platform-average ACOS trending in the wrong direction, with real dispersion underneath.
Skai's aggregate retail-media CPC has stayed roughly flat, within a few cents of a dollar, for seven straight years, but that blended average sits across every network, format, and category, and it obscures what is happening specifically on Amazon. Amazon's own average Sponsored Products CPC has climbed to roughly $1.18 to $1.21, up an estimated 8% to 12% year-over-year, and hit a fresh record high heading into Prime Day. In competitive categories, CPCs commonly run $1.20 to $2.50 and can exceed $3.00; seasonal spikes during Prime Day and Q4 push costs 60% to 80% higher than baseline. Platform-average ACOS sat in the mid-to-high 20s in 2025 and is trending toward the low-to-mid 30s in 2026 as CPCs continue climbing.
The blended retail-media CPC has held near a dollar for years, while Amazon's own Sponsored Products CPC has kept rising.
| Category | Typical CPC | Typical ACOS / ROAS |
|---|---|---|
| Platform average | About $1.18 to $1.21, record highs into Prime Day | Mid-to-high 20s ACOS, trending toward low-to-mid 30s |
| Top-performing advertisers | Same auction, disciplined bidding | Low-to-mid 20s ACOS, 4x to 4.5x ROAS |
| Books and Media | Among the lowest CPCs on the platform | About 18% ACOS, about 5.5x ROAS, most efficient category |
| Beauty | Highest CPC on the platform, about $2.47 | 35% to 45% ACOS tolerated during acquisition |
The gap between the top row and the second row is the same auction. The difference is bid discipline, budget allocation, and how quickly an account reacts when costs move, not access to some different, cheaper version of Amazon advertising.
Active management matters more as the underlying auction gets structurally more expensive.
When the underlying auction gets more expensive every quarter, the return on a fixed ad budget increasingly depends on active management rather than a set-it-and-let-it-run posture: full-funnel allocation instead of Sponsored Products alone, TACoS managed against contribution margin rather than ACOS in isolation, and bid strategy that reacts to cost shifts before they show up in a monthly report. That is the same distinction that separates the platform average from the top-performing accounts in the table above.
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