How Marketplaces Are Building Their Own Ad Networks

Episode 31 of The Platform Economy: Lucas and Luna explore why major marketplaces like Amazon, Walmart, and Instacart are building their own advertising businesses, pulling billions in ad spend away from Google and Meta. They break down the economics: Amazon's advertising revenue grew from $4.7 billion in 2017 to over $47 billion in 2025, with profit margins exceeding 50%. The hosts discuss how marketplace ad networks leverage first-party purchase data to deliver higher conversion rates than traditional search ads, and what this means for small sellers who now must bid for visibility on platforms they already pay commissions to. They also examine the tension between organic search results and paid placements, and whether marketplace ads create a 'pay-to-play' dynamic that disadvantages smaller merchants. Specific examples include Walmart's 'Walmart Connect' and Instacart's 'Carrot Ads'. The episode closes with a reflection on whether marketplace ad networks represent a fundamental shift in retail media or a natural extension of platform power. #MarketplaceAds #RetailMedia #AmazonAdvertising #WalmartConnect #Instacart #PlatformEconomy #DigitalAdvertising #Ecommerce #SponsoredProducts #FirstPartyData #PayToPlay #SmallBusiness #SearchAds #Business #Technology #FexingoBusiness #BusinessPodcast #ThePlatformEconomy Keep every episode free: buymeacoffee.com/fexingo