Amazon is moving to disrupt another market. This time, it’s the ad-supported streaming world. The e-commerce giant is dishing out an opportunity for marketers to reach an impressive 115 million monthly viewers in the U.S. alone. This shift comes as Amazon has decided to make the ad tier default for its tens of millions of subscribers worldwide.
Amazon’s scale makes it an attractive platform for existing advertisers, especially those who often invest heavily in television. As per reports, Amazon is making efforts to increase interest within holding group brand teams. Major events like the upcoming presidential election and Super Bowl could draw more advertisers into Amazon’s fold.
Despite the relatively high ad costs, estimated at 36 CPM (cost per thousand impressions), advertisers are eager to collaborate with Amazon. This enthusiasm comes mainly from the invaluable retail and e-commerce data that Amazon offers in conjunction with a robust closed-loop attribution system.
However, there are some limitations. Marketers will have to purchase ads on Prime Video via Amazon’s ad tech. The ads will not include Thursday Night Football games or Amazon Freevee applications. Despite these restrictions, advertisers are excited with the prospect of advertising across Amazon originals from Prime Video and licensed TV and movies; sponsorships, guaranteed buys, and preferred deals are available.
Interestingly, the initial forecasts for Amazon’s venture into ad-funded streaming seem cautious. This caution might be due to the potential shift in advertising strategies with the arrival of Prime Video ads. As Sam Bloom, head of partner strategy at PMG, points out, the challenge lies in Amazon needing to have something for every type of marketer, whether they utilize 5% or 80% of the platform.
To attract more users to its new inventory, Amazon is offering incentives. Some are related to specific campaigns, such as a 20% rebate in free impressions for those who spend $50,000. Amazon also has a set of incentives linked to vendor media joint business plans and agreements as part of a larger retail program or partnership.
All these moves by Amazon are part of their goal to entice marketers to invest more, leading to a new revenue stream from ad-supported streaming.
Source: Pitch deck: How Amazon is selling ads on Prime Video to advertisers
