The ad dollars are nice but the real prize for Amazon is the infrastructure itself – the rails on which the entire system runs.
Up until now that’s been the quiet part of its ad strategy. Moving forward it’s saying it out loud. The company is launching a managed cloud network built specifically to handle the high-speed, data-intensive transactions that make programmatic advertising possible.
It’s called AWS RTB Fabric, and it’s been quietly in beta for months.
At its core, it’s a specialized computing environment built inside AWS to host and move real-time bidding traffic – the trillions of bid requests and responses that shuttle between the ad tech vendors responsible for shuttling ad dollars between advertisers and publishers.
“With AWS RTB Fabric, we’re making it easier for ad tech to work in the cloud,” said Stephanie Layser, global head of publisher ad tech solutions at Amazon Web Services.
That timing isn’t accidental. Ad tech is under strain, pressured by consolidation, AI and the constant demand for efficiency. The major cloud platforms that power much of the industry weren’t built for real-time bidding where every millisecond counts. AWS RTB Fabric lands squarely in that gap, promising to make the system faster and cheaper.
“We want to make sure that we’re giving customers a competitive advantage and the resources they need to upgrade their platforms and meet this moment,” said Layser.
The main way AWS RTB Fabric will do this is through the RTB Broker, a feature meant to cut integration times between ad tech partners from months to hours. It essentially reduces a convoluted process to a few clicks needed to connect to anyone else running on AWS RTB Fabric, AWS or even on competing clouds like Google Cloud Platform or Microsoft Azure.
Once live, AWS RTB Fabric delivers bid requests at single-digit millisecond latency — fast enough to give ad tech algorithms more breathing room to make better decisions about where to spend money. And true to form, Amazon has said it can cut the networking costs associated with doing this by up to 80% compared to standard cloud rates. They did not provide specific figures.
“By looking through the infrastructure and eliminating certain aspects of it we were able to come to a lower cost than traditional networking costs as it exists today,” said Layser.
In short, it’s classic Amazon: use its scale to make an expensive necessity cheaper, and in the process, pull the market onto its rails. How much it can pull over will depend on a mix of factors — some commercial, some strategic. But as with all things infrastructure, speed and cost tend to decide who wins. Maybe, even more so for ad tech.
For years, vendors have faced a costly choice: run their platform on private infrastructure or rely on the public cloud, which scales easily but adds latency and data costs. Most split the difference, running latency-sensitive workloads on owned hardware and the rest in the cloud.
AWS RTB Fabric doesn’t erase those trade-offs. But it could make them easier to manage — and that may be enough for some companies. Especially, if they believe doing so frees them to focus on building — preferable (for Amazon) on Amazon’s cloud. Over time, they’ll be able to develop tools to filter or enhance bid requests on AWS RTB Fabric itself, from fraud detection to curation. For now, they’ll use Amazon’s own. But the direction is clear: a marketplace of third-party tools built on AWS, running through Amazon’s infrastructure.
It’s Amazon’s way of making AWS RTB Fabric hard to ignore — not only for its speed or price but because it’s becoming the connective tissue of the ad tech economy.
“We want to be the preferred place for ad tech to run,” said Layser. “Rather than them [ad tech vendors] continuing to invest in on premise infrastructure or go to any of our cloud competitors, we want to make sure that we have a fit for purpose solution that makes it easy for them to handle RTB workloads.”
So far that includes YieldMo, TripleLift, Viant and, unsurprisingly, Amazon Ads itself. They’re using the system to run auctions faster and more efficiently, said Layser. When asked if AWS offered any incentives to get them onboard, she said no — the cost and performance benefits were incentive enough.
Whether that holds remains to be seen. These companies already have deep ties to AWS and Amazon’s broader ad business so an early trial makes sense. The real test will come as AWS tries to scale beyond that circle, especially with the longer tail of ad tech. Convincing that layer of the market will determine whether AWS RTB Fabric becomes ubiquitous infrastructure or just another system in Amazon’s orbit.
“We’re entering a transformative time where everything is changing in ad tech, and everyone has to rework what they currently do,” said Layser. “We wanted to make it fast and effective to run RTB in the cloud so that our customers, and anyone else who wants to — can do so easily.”
This is what big ad businesses do. They don’t just compete for ad dollars. They compete for the infrastructure those dollars run on. That’s how they benefit from repeat revenue with a network effect: every ad tech company that runs on AWS RTB Fabric also strengthens Amazon Ads. The more of the ecosystem built on Amazon’s cloud, the faster and cheaper it becomes for those same players to plug into its ad marketplace — and the more data and demand Amazon captures in return. Each side feeds the other. AWS lowers the cost of participation. Amazon Ads raises the incentive to join, until the two become inseparable parts of the same machine.
“AWS is absolutely central to Amazon’s advertising play,” said Karsten Weide, principal and chief analyst at W Media Research. “They are already making a lot of money, but they are also controlling more and more of the infrastructure that powers how digital ads are bought, sold, and measured. That translates into long-term strategic strength.”
AWS isn’t just part of Amazon’s ad ambitions, it’s what makes them possible. The cloud unit generated $30.9 billion revenue and $10.2 billion in operating income last quarter, accounting for roughly 70% of Amazon’s total profit.
Still, owning the rails means owning the risk. This week’ s AWS outage was a reminder that even the most advanced clouds have limits. As Amazon invites more of ad tech’s real-time traffic into its system, the cost of a single disruption grows. For Amazon, however, it’s a risk worth taking. The cloud unit generated $30.9 billion revenue and $10.2 billion in operating income last quarter, accounting for roughly 70% of Amazon’s total profit.