Amazon’s ad engine downshifted sharply in the third quarter, but the more important story for retail media came later: DoorDash agreed to buy Instacart for roughly $17 billion.
Amazon’s ad growth hits a calendar wall
Advertising services revenue reached $19.64 billion in Q3 2026, up 10.9% from $17.70 billion a year earlier, or 12% excluding currency effects. That is a steep slowdown from the 26% growth Amazon posted in Q2. Ad revenue also fell $172 million from the second quarter.
Amazon’s explanation was timing, not demand. Prime Day moved into June in most large countries, pulling a week of promotional spend into the previous quarter. The company described it as ‘timing anomalies primarily related to Prime Day (and a couple other timing factors).’ CEO Andy Jassy also pointed to the absence of NBA games in Q3; the new season opened October 23.
Look at the two quarters together and ad growth was about 18%, PPC Land calculated. That is slower than the 22% Amazon recorded in Q4 2025, but far from a wipeout. Amazon sees high-teens ad growth in Q4 2026. Investors still did not like the optics: net income came in at $20.7 billion against $21.2 billion a year earlier, and shares fell about 7% after hours.
Jassy also said external AI agents are not hurting Amazon’s ad business yet. ‘Few customers are doing much shopping this way yet,’ he said.
DoorDash buys Instacart for $17bn
DoorDash agreed on the same day to acquire Instacart for $65.00 per share, an equity value of about $17 billion, a 26% premium to Instacart’s closing price on October 22. At least 75% of the consideration will be paid in cash, and the deal is expected to close in late 2027 or the first half of 2028 after antitrust review.
This is a grocery ad story as much as a delivery deal. It merges two retail media networks. DoorDash passed $1 billion in ad revenue in 2024, while Instacart books more than $300 million a quarter. Instacart’s Q3 advertising and other revenue grew 23% to $331 million. ‘Grocery is one of the hardest things to get right online,’ said Tony Xu, DoorDash co-founder and CEO.
What marketers should do
Retail media remains one of the most attractive channels in digital advertising because it closes the loop between ad exposure and purchase. But consolidation changes leverage. A single DoorDash-Instacart grocery ad stack could simplify planning, or concentrate pricing power.
- Normalise ad growth across quarters when Prime Day, sports rights or other calendar events shift.
- Audit your retail media mix now, before a combined grocery network becomes the default.
- Lock in benchmarks and terms while both teams still compete for your budget.
Amazon’s wider business shows the cost of scale. AWS grew 39.3% to $45.98 billion, but capital spending hit $77.26 billion in the quarter and trailing twelve-month free cash flow was an outflow of $42.36 billion. Growth in retail media still carries heavy infrastructure behind it.
Source: PPC Land
