Amazon’s advertising business is on fire. The tech giant posted $11.8 billion in ad revenue in Q1 2025, marking a 24% year-over-year increase. This cements its position as one of the fastest-growing players in the digital ad space, rivalling even Google and Meta.
But a new threat looms: rising tariffs on Chinese imports.
Many Amazon sellers rely on products manufactured in China. If tariffs increase, their operational costs go up, leaving less room in their margins for ad spending. For a platform that thrives on seller-funded ads, this could mean a potential dip in ad demand, especially from small-to-medium businesses that are already cost-sensitive.
The concern isn’t immediate, but it’s strategic. If trade tensions escalate, Amazon may need to rethink how it supports its sellers while sustaining ad revenue growth.
Still, for now, its ad momentum is strong, fueled by high-intent shopper data, retail media dominance, and new AI-powered ad tools.
Key Takeaway:
Amazon’s ad engine is stronger than ever, but macroeconomic shifts, like global tariffs, could test how resilient and flexible that growth really is.