CNBC reported in December that the U.S. e-commerce giant is experimenting with various advertising products across its portfolio and off of its website. This includes e-commerce search and video products too.
Sources also told CNBC this week that Amazon is in talks with large companies about letting them promote products on the Echo smart speaker devices via the voice assistant Alexa.
The news shows how Amazon is gearing up for a big year of advertising.
Amazon currently has three main types of ad products. The first is sponsored product ads which appear when you search for an item on Amazon. The second is headline search ads which also display in search results at the top of the page. And the final one is a standard product display ad paid for by a company.
Mizuho said it hosted an investor call with Merkle RKG, a marketing and data platform. Based on Merkle's studies, Mizuho said search appears to be the "biggest opportunity" in advertising for Amazon "given its scale and the potential to increase pricing."
But the investment bank said that Amazon's advertising technology is still in its "early development stage so it is well behind that of Google." For example, Mizuho said Amazon's customer targeting products are not up to scratch yet and therefore monetization is harder.
"That said, we believe that Amazon has plenty of headroom to improve its performance and monetization," Mizuho analyst James Lee wrote in the note.