Search for “toothpaste” on Amazon, and the top of the web page will show you a mix of popular brands like Colgate, Crest and Sensodyne. You’ll find products by Native, Dove, and Secret if you do a different search.

If you look closely, however, you will see that these listings have advertisements with the “sponsored label” attached to them. Amazon generates hefty revenues from top brands due to the rising cost of obtaining valuable placement on the largest e-commerce website.

Jason Goldberg (chief commerce strategist at publicis advertising) stated that there are fewer organic results, which means it is increasingly difficult to rank on the top search pages.

To reach unpaid results on Amazon for toothpaste, consumers must swipe up twice on their mobile apps.

Amazon had previously placed two to three sponsored products at search results’ top. Now, there may be as many as six sponsored products that appear ahead of any organic results, with more promotions elsewhere on the page, said Juozas Kaziukenas, who runs e-commerce research firm Marketplace Pulse.

Amazon states that the amount of ads displayed depends on what search term was used and whether customers are using Amazon App, desktop, or mobile.

Amazon doesn’t separate advertising revenue from other sales, but it does include ads. That category was the fastest-growing part of Amazon’s overall business in the second quarter, with revenue soaring 87% from a year earlier to more than $7.9 billion.

In 2018, Amazon leapfrogged Microsoft to become the third-largest ad platform in the U.S., trailing only Google and Facebook. Amazon is capitalizing on its market control, knowing that its website or app is where many consumers begin their online shopping journey.

Kaziukenas said Amazon and founder Jeff Bezos have completely transformed from being anti-advertising. The site has become so profitable that advertisements “have replaced almost all of its functionality,” Kaziukenas stated.

Amazon spokesperson stated that search results do not have dedicated advertising slots. Users may be presented with one or more ads, as well as multiple advertisements, depending on their preference. Amazon stated advertising is optional for both sellers and brands, however it could improve the visibility of their products.

The spokesperson stated in an email that sponsored advertising is one way they help shoppers find the best brands and products. No matter how results are presented, we always strive to provide the best possible customer experience.

But big manufacturers of consumer goods aren’t the only ones occupying the most valuable virtual property. Amazon populates search results with their own products. A search for soap results in Amazon’s listings will bring up an Amazon Solimo promotion, before advertisements for Pantene and Nexxus products, L’Oreal, etc.

Sponsored product ads accounted for roughly 73% of retailers’ ad spend on Amazon in the second quarter, according to digital marketing agency Merkle. Last year, Amazon began replacing product recommendations in listings with product ads.

Amazon also offers new formats for ad types, such as video ads or sponsored brand posts. These feature one brand with multiple product listings and are displayed in a banner at top of page.

Competition has also intensified as a result of the rise of Amazon aggregators, venture-backed companies that are raising big money from outside investors to acquire independent sellers. Kaziukenas stated that some smaller sellers fear they won’t be able compete with the aggregators. These aggregators have “massive budgets” to spend on Amazon and in advertising.

He said that they are now going to compete against larger, well-funded sellers instead of competing with smaller sellers.

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