How Amazon is changing the streaming advertising market

Is it just me, or are brands on #Amazon moving up the funnel? Over the years, we've focused a lot on refining and optimizing our approach to bottom-of-funnel ads (paid search). Using Amazon to capture demand generated elsewhere. But there's a shift: the brands growing the most are generating a lot more external and organic traffic, and branded search. Paid search isn't enough to compete. The recommendations I'm hearing today are wildly different from 2 years ago. Much higher investment in DSP (which has vastly improved as a tool) - up to 20% of spend. Also a big push towards OTT/STV. Mostly suggesting at least 5% of spend for early tests. We certainly are thinking up the funnel. I'm curious -- ➡ what do you think about #topoffunnel for Amazon? and ➡ how are you approaching it today?

Amazon’s Prime Video ads rollout gains traction as advertising revenue at the e-commerce giant was growing at 24%. Amazon’s revenue derived from #advertising was up 24% year-over-year in Q1 to $11.82 billion, according to an earnings statement. Much of Amazon’s growth in the category still stems from #retailmedia in the form of sponsored products listings that surface as users browse its #ecommerce platform. The introduction of commercials to Prime Video in January also showed encouraging early results according to CEO Andy Jassy: “I think advertisers are excited about being able to expand their ability to advertise with us in video beyond Twitch and Freevee to Prime video shows [and] movies.” The change is important to Amazon’s continued momentum in #advertising as it invests in expensive premium programming and looks to offer marketers full-funnel capabilities that boost brand-building efforts. #media #marketing

From Deadline: Amazon Ads is rolling out Brand+, a new offering for advertisers that combines what it estimates are “trillions of signals” from shopping, browsing and streaming across its footprint. The aim of the #data-powered offering is to identify consumers who are predicted to be in the market for a brand’s product or service within the next three months. Marketers can use Brand+ to deliver their messages on video streaming platforms like Prime Video & Amazon MGM Studios and Twitch as well as top video publishers like BuzzFeed, Fox Corporation. and Dotdash Meredith, Amazon said. In addition to its own platforms, Amazon is also a massive gateway to the broader streaming marketplace with Fire TV connected devices and the Amazon Channels store offering access to tens of millions of households beyond Prime and Twitch. Simplifying the buying process is a key goal of Brand+, with Amazon Ads affirming that inventory can be purchased via the platform in as few as four clicks. “For the first time on the Amazon DSP, advertisers can apply #AI-optimized automation to purchase TV #advertising that reaches unique audiences of customers most likely to buy their products or services In one hypothetical use case offered by Amazon Ads, a travel company looking to drive awareness among their highest potential customers could upload their first-party signals to the Amazon DSP. Brand+ would then analyze these signals and incorporate with Amazon Ads shopping and streaming signals to power machine learning, identify valuable patterns and recognize customers who have searched for travel gear, bought travel guides, and streamed travel shows. Brand+ then delivers TV ads for the travel services to this audience of potential customers. The relevance of the resulting ads, as envisioned by Amazon, would fulfill the longtime promise of #streaming. Unlike the “spray-and-pray” mode of linear #TV, streaming can harness digital technology to give ads more traction for both seller and audience, at least under the industry’s long-held theory. Any viewer of ad-supported streaming platforms can attest that the industry has not arrived at Valhalla just yet. #marketing https://lnkd.in/eJJVWRcV

As digital #advertising continues to evolve, #Amazon is actively tempting publishers, offering enticing opportunities to tap into its vast ecosystem. This article shares the strategies Amazon is employing to woo publishers, highlighting the symbiotic relationship between the #e-commerce giant and content creators. Publishers, in turn, are teaming up with Amazon to unlock new opportunities and reach even more eyes, which creates a win-win scenario for both parties. #AmazonAds #DigitalAdvertising #PublishingPartnerships Digiday Ronan Shields Seb Joseph

So there are a few very interesting points that emerge from this article on #Amazon and how its rollout of adverts on #AmazonPrime is shaking up the #SVOD advertising market. 1. Advertising is now vital to Amazon (both on the website and increasingly with Prime). Amazon made nearly $47bn of advertising revenues in 2023. Assuming a margin of 50%, which is probably conservative (the ANA states Retail Media margins are between 50-70% and on video, Prime can expect 90%+ drop through), that would mean advertising made close to two-thirds of Amazon's trailing 12 months operating profit in 2023 (look it another way - the e-commerce business is losing a lot of money). 2. What Amazon did in automatically flipping its customers to advertising unless they opted out was a very wise strategic move - it gave them scale automatically. They can also, as stated, leverage their website data, which will be a huge advantage in Retail Media. 3. Re pricing, it looks like they have adopted a classic predatory pricing stance especially with Netflix, although (interestingly) not with Disney. That will put pressure on agencies / advertisers to take an 'either / or' approach with the platforms. 4. Who is at most strategically at risk here from Amazon's move. One is #Netflix, as Amazon's move threatens to undercut its appeal to advertisers. The second is more mainstream players such as #WBD who were looking to advertising to boost profits (for #Disney, I always thought their ad tier was more about effectively imposing a huge price increase on most customers). 5. What this shows (again) is just how the streaming landscape is turning into a cash nightmare for the established media players and is likely to lead to several of the Tech giants getting their hands on a substantial amount of the TV advertising money - but only in the United States. As usual, this is not investment advice. Daniel Thomas Camilla Hodgson

📌Amazon revolutionizes advertising: surpasses YouTube and accelerates with Prime Video ads Amazon’s advertising business is booming, generating more than $51 billion in annual revenue. This figure exceeds YouTube’s ($GOOGL) ad revenue and represents approximately 35% of Meta’s ($META) total revenue. Even more impressive is the rapid growth of Amazon’s advertising segment, which has achieved a compound annual growth rate (CAGR) of 36.55% over the last eight years, far outpacing its industry competitors. With a strong foundation already in place, Amazon is poised to expand even further, especially with Prime Video ads just beginning to roll out. This new opportunity could unlock significant potential, tapping into Amazon’s vast audience and existing ecosystem to drive even more growth in the advertising space. Investors should keep an eye on this segment as it continues to scale and innovate. It could become another $100 billion revenue stream for Amazon. Amazon Google Meta YouTube

Here is what you need to know about the Amazon Ads Upfronts this week – brought to you by VaynerMedia’s Hugh Scallon, SVP of Media and Head of Video Activation!🎥 📝 Full Funnel Advertising: Amazon showcased its ability to offer "full funnel advertising at scale for everyone," meaning brands don’t need to sell on Amazon to benefit from its media, ad placements, and measurement tools.📝 🎤 Prime Video's Evolution: With ads now on Prime Video, Amazon is moving beyond its original content roots. The event featured A-list stars like Jake Gyllenhaal, Will Ferrell, and Reese Witherspoon, highlighting a slate of new and renewed shows and movies for 2024/25.🎤 💰 Investment Appeal: As a newcomer to the Upfronts, Amazon aimed to attract new investments💰. While premium content sponsorships might cost extra, the extensive VOD and FAST channel catalog offers efficient pricing and scale for both digital and TV marketers. ⚽️🏎️ Live Sports Commitment: Amazon emphasized its growing presence in live sports, including NFL Thursday Night Football, NASCAR, and women’s pro soccer and basketball. This positions Amazon uniquely to manage TV marketing through extensive remarketing capabilities.⚽️🏎️ 🎶 Innovation and Breadth: Amazon highlighted its commitment to innovation and its comprehensive offerings across platforms like Twitch, Amazon Music, and Alexa. With nearly ten entertainment genres, Amazon aims to cater to all viewer preferences, backed by its robust sports and entertainment portfolio.🎶 #amazonads #amazonupfronts #upfronts #media #streaming

Who else is excited about this year’s upfronts? Participating in the evolution of video advertising at Amazon was fun, and it’s just as fun to watch from the sidelines. The early efforts and various misfires before we eventually got it right led to today’s offering - ads on Prime Video - which offers advertisers an incomparable premium video solution, providing: 𝗣𝗿𝗲𝗺𝗶𝘂𝗺, 𝗰𝘂𝗹𝘁𝘂𝗿𝗮𝗹𝗹𝘆 𝗿𝗲𝗹𝗲𝘃𝗮𝗻𝘁 𝗰𝗼𝗻𝘁𝗲𝗻𝘁: Scripted, unscripted, and live sports (Fallout anyone?!) 𝗜𝗻𝗰𝗿𝗲𝗱𝗶𝗯𝗹𝗲 𝗿𝗲𝗮𝗰𝗵: 115M users in the US, the majority of which shop on Amazon 𝗨𝗻𝗽𝗮𝗿𝗮𝗹𝗹𝗲𝗹𝗲𝗱 𝗙𝗶𝗿𝘀𝘁-𝗽𝗮𝗿𝘁𝘆 𝗱𝗮𝘁𝗮: To reach target audiences and measure impact 𝗛𝗶𝗴𝗵-𝗶𝗺𝗽𝗮𝗰𝘁 𝗮𝗻𝗱 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝘃𝗲 𝗮𝗱 𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻𝘀: From shoppable ads to premium sponsorships 𝗠𝘂𝗹𝘁𝗶𝗽𝗹𝗲 𝗯𝘂𝘆𝗶𝗻𝗴 𝗺𝗼𝗱𝗲𝗹𝘀: Managed, self-service, and programmatic The video solution is impressive in its own right, but when combined with the rest of Amazon’s diverse ad portfolio (search, display, audio/podcast, etc.), it forms a comprehensive solution that is truly remarkable. With $19B in upfront spend at stake, Amazon is in a prime position to secure a significant share. To all my former Amazon colleagues, get ‘em! p.s. Shifting gears to another passion, which I’ve mentioned in my most recent posts…take care of your heart health. Know your risk factors and have a proactive conversation with your doctor during your annual physical. Stay heart-healthy! #upfronts #amazonprimevideo #amazonads #amazonadvertising

https://lnkd.in/efAyeWpJ? Amazon has not gotten as much churn as expected from introducing ads to Prime, and plans to increase their ad load. Part of Amazon's model is, probably, that if the targeting is good enough and the cost of production is low enough, there's effectively unlimited demand for ads at the right price. Amazon needs to hit $3/month in ad revenue to achieve topline economic parity with their subscription product, and while there are costs associated with the ads business, many of them are fairly fixed, especially if Amazon scales up low-quality or generative AI-based ads.

🌟 Ever noticed how good advertising is like a well-tailored suit? 🕴️ It fits just right, makes you stand out, and leaves a lasting impression! Just like how Amazon had its best advertising year yet, fueled by Prime Video. 📺💼 🔍 Here's the scoop: Prime Video was the secret sauce that spiced up Amazon's advertising success. It's like adding the perfect seasoning to a dish - enhancing the flavor and making it irresistible! 🌶️🍲 🚀 With every click and view, Amazon's ad strategy soared higher, much like a hot air balloon catching a favorable wind. 🎈💨 And just like that, they reached new heights in the advertising world! 🌐✨ 💡 So, the next time an ad catches your eye on Prime Video, remember, it's not just a commercial break; it's a carefully curated experience designed to captivate and convert. Advertising truly is an art form, don't you think? 🎨💬 https://lnkd.in/gttCT9zj