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When a chain of physical therapy centers wanted new patients, it aimed online ads at people near its offices who had bought knee braces recently on Amazon.

When a financial services provider wanted to promote its retirement advisory business, it directed ads to people in their 40s and 50s who had recently ordered a personal finance book from Amazon.

And when a major credit card company wanted new customers, it targeted people who used cards from other banks on the retail site.

The advertisers found those people by using Amazon’s advertising services, which leverage what the company knows better than anyone: consumers’ online buying habits.

“Amazon has really straightforward database — they know what I buy,” said Daniel Knijnik, co-founder of Quartile Digital, an Amazon-focused ad agency that oversaw the ads for the clinics and retirement services. “For an advertiser, that’s a dream.”

Ads sold by Amazon, once a limited offering at the company, can now be considered a third major pillar of its business, along with e-commerce and cloud computing. Amazon’s advertising business is worth about $125 billion, more than Nike or IBM, Morgan Stanley estimates. At its core are ads placed on Amazon.com by makers of toilet paper or soap that want to appear near product search results on the site.

But many ad agencies are particularly excited by another area of advertising that is less obvious to many consumers. The company has been steadily expanding its business of selling video or display ads — the square and rectangular ads on sites across the web — and gaining ground on the industry leaders, Google and Facebook.

In addition to knowing what people buy, Amazon also knows where people live, because they provide delivery addresses, and which credit cards they use. It knows how old their children are from their baby registries, and who has a cold, right now, from cough syrup ordered for two-hour delivery. And the company has been expanding a self-service option for ad agencies and brands to take advantage of its data on shoppers.

“That is where the insane scale can happen for the business,” said John Denny, a vice president at CAVU Venture Partners, which invests in consumer brands like Bulletproof coffee and Hippeas chickpea puffs.

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It not only finds those customers, but Amazon automatically shows different ads to different people based on their shopping behavior. People who do a lot of research on products may see an ad that features positive product reviews, whereas those who have signed up for regular deliveries of other products in the past might see an ad offering a discount for those who “Subscribe & Save.”

“Early tests are showing this is insanely powerful,” Mr. Denny said. “They can do this and nobody else can come close.”

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Originally posted by well-tempered gardener:
Can't wait to see a photo of you in your MAGA hat.