Mercado Libre Reshapes Retail Media with AWS Partner Mutt Data and Stability AI in Amazon Bedrock

In e-commerce, the visual impact of product images is often the deciding factor in a successful sale. High-quality visuals significantly shape a potential customer’s experience, yet creating compelling display ads remains a challenge for many vendors. It’s a process that demands time, expertise, and resources. This includes understanding the buyer persona to designing and producing multiple versions of promotional images. For small and medium-sized businesses (SMBs) limited budgets and resources often prevent them from accessing professional agencies that could elevate their product promotions. Many sellers also underestimate the power of well-crafted banners in driving visibility and sales.

Considering that 80% of Mercado Libre’s sellers are SMBs, they were looking for a solution tailored to empower SMBs and accelerate their growth on the platform through its ad products. This innovation comes at a time when digital advertising is booming, projected to grow by 6.5% in 2025 to $442.6 billion, representing 58.8% of global ad spend. Retail media is at the forefront of this growth, with an impressive 17.2% Compound annual growth rate (CAGR) over three years. Retail media spending alone is expected to climb by 10.2% this year and 10.5% next year, reaching $141.7 billion and accounting for 13.6% of total ad spend (Source: Dentsu and Mobile Marketing Magazine). In this thriving landscape, solutions that enhance ad performance and metrics aren’t just relevant—they’re essential for sellers aiming to stay competitive and succeed.

Mercado Libre selected AWS Partner Mutt Data to develop a cutting-edge solution to streamline the creation of high-quality product images for its sellers. Leveraging AWS’s robust infrastructure and Stability AI’s Stable Diffusion text-to-image model in Amazon Bedrock, the companies collaborated to create GenAds, an innovative, AI-powered tool that empowers small and long-tail sellers to quickly go to market with visually impactful product listings. Here are a few images created with GenAds.

Pablo Moretti, vice-president of Mercado Libre’s Marketplace, details that the company, along with Mutt Data, decided to use Amazon Bedrock, a fully-managed service that offers developers access to high-performing foundation models from leading companies through a single API due to the scalability, reliability, and innovation needed for such a solution. "Its infrastructure ensures high availability, enabling Mercado Libre to handle fluctuating workloads and consistently generate top-quality images, even during peak demands", Moretti explains. “Mutt Data demonstrated exceptional expertise in generative AI, and leveraging Amazon Bedrock's cutting-edge technology ensured our solution was both scalable and secure. The project was executed flawlessly, and their support was invaluable. The use of Amazon Bedrock played a crucial role in improving our data processing and creative capabilities, with the combined efforts of Mutt Data and AWS.”

According to Pablo Moretti, Amazon Bedrock’s built-in safety filters are a key feature, preventing the generation of inappropriate content and maintaining the high visual standards critical for e-commerce. The platform also supports rapid innovation — Mercado Libre can test and implement updates like model transitions with minimal cost and effort, keeping pace with the dynamic retail environment. The process begins with Mercado Libre pre-selecting sellers and their products based on performance and popularity criteria. From this initial pool, products are further refined for advertising use. Leveraging Stability AI's image generating AI model Stable Diffusion in Amazon Bedrock, the tool creates contextualized images that places products in visually appealing backgrounds. The system also refines crucial details, such as reflections and shadows, to ensure professional-grade quality.

Only the most visually engaging and technically precise images make the final cut, adhering to strict advertising parameters like high resolution and proper cropping. This automated approach reduces the burden on sellers and accelerates the production of impactful ads, helping Mercado Libre’s sellers capture customer attention and thrive in the competitive e-commerce space. GenAds operates by streamlining ad creation for sellers on the marketplace. Sellers can publish items and opt for display ads with automatically generated banners. Weekly, category-based backgrounds are created using Stable Diffusion via Amazon Bedrock, stored in Amazon Simple Storage Service (Amazon S3), and indexed in Amazon DynamoDB. Daily, a selection process identifies popular and visually appealing items, and Anthropic’s Claude 3 Sonnet model generates prompts to combine items with backgrounds, creating banners stored in the same manner. Finally, an API allows the front end to retrieve and display these banners for ad campaign proposals.

After an initial expansion phase with a small batch of invited sellers and a few countries, Mercado Libre's GenAds launched unrestrictedly mid-Q2 and has already seen remarkable results. GenAds has been rolled out across seven Latin American countries, including the region’s three largest economies: Brazil, Mexico, and Argentina. This initiative accounted for a 45% increase in impressions, and over 90,000 product creatives have been generated and continuously updated, benefiting tens of thousands of sellers. The click-through rate in Hispanoamerica also witnessed a 25% increase compared to the average of non-GenAds display ads. As the project expands with more sellers and countries, Mercado Libre anticipates these outstanding results will grow tenfold in the next six months.