Amazon's private-label business is on a tear and rival marketers are racing to stay a step ahead of its tactics

Amazon is building up its own brands, requiring rival marketers to navigate a slew of Amazon brands that it's heavily promoting on its platforms.

In fact, Amazon is under growing scrutiny from regulators for selling its own items in a marketplace that it manages. In March,Amazon says about 1% of its sales come from private labels. Private label brands represent 25% or more of sales for other retailers,Amazon routinely uses prominent ad formats on Amazon.com to advertise its private label and exclusive brands.

"Our ad policies work back from customers to provide them the best experiences in our store," the spokesperson told Business Insider."Both our selling partners and private brands can bid on sponsored ads. Our advertising algorithms optimize for the best possible customer experience, starting with relevance to the shopping query, and treat all bids equally when determining which ad to show."Advertisers also have run into creative and messaging challenges on Amazon.

"Amazon wants any display creative that appears on Amazon.com to conform to its brand guidelines and not be a disruptive user experience," said the agency exec. In another example, coupon sites — which could lead to non-Amazon websites — are not allowed to advertise on Amazon's properties, according to the company's policy.

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