How Amazon Prime Video made itself an essential pick for brand media plans
Amazon Prime Video’s ad business celebrates its first birthday today.
Over the course of 12 months, it’s fine-tuned a pitch to buyers and brands to put the case for their investment beyond argument — and in doing so, overtaken streaming rivals and ensconced itself on brands’ media plans, while padding the margins of Amazon’s already formidable ad business.
The platform shifted from emphasizing the quality of its Prime Video content slate, which includes fare like the Rings of Power, The Boys and The Marvelous Mrs. Maisel, to highlighting its growing measurement capabilities and new ad formats, according to seven media buyers who spoke to Digiday. All the while, it’s held CPMs at a competitive level, forcing rivals to lower their own prices. A spokesperson for Amazon declined requests for an interview.
That appeal has convinced advertisers to go beyond dipping their toes, and instead jump in at the deep end. According to a January report published by media agency Tinuiti based on its own client data, ad spend on Amazon rose eightfold between the first and fourth quarters of 2024. (Tinuiti didn’t provide specific dollar amounts).
Steve Parker, executive director at U.K. agency Medialab, estimated its clients now spend 10-30% of their budgets on CTV ads, including Prime, while Mike Seiman, CEO and chairman of New York-based media shop Digital Remedy, estimated that his clients typically assign up to 10% of their CTV spend to Amazon Prime.
Neither exec gave exact figures, but that budget is in line with their investments on Netflix’s ad platform, despite the Stranger Things streamer’s year-long headstart in the advertising market.
Inside Amazon Prime’s assets
Amazon Prime’s long-awaited entry to the ad market started with a bang. This time last year, the platform made its ad-supported tier the default option for Prime users; those wanting to opt out would have to pay a premium.
It proved a shortcut to a huge advertising audience. 12 months on, 104 million U.S. users of Amazon Prime — 80% of its 130.4 million-strong user base — sit on its ad tier, compared with 46 million Disney+ ad tier subscribers and 70 million Netflix users according to an eMarketer estimate.
In early meetings with media buyers held in September and October of 2023, Amazon’s initial pitch to advertisers rested on the size of its audience and the strength of its commissioning.
“They were talking about the quality and strength of their programming content — Clarkson’s Farm, The Boys and Reacher, things like that,” said Harry Packshaw, head of AV at Havas Media Network.
Amazon’s pitch has been fronted by executives such as vp of U.S. advertising sales Tanner Elton, a 13-year veteran of the e-commerce giant, and the head of its Northern European video sales specialists team David Amodio, who joined the streamer in May after 18 years at Channel 4.
Its scale, premium programming, a low ad load and a “fair” price made it a persuasive option for brands, according to Total Mediaplus’ head of broadcast Kieren Mills.
“Amazon’s very competitive compared to the life of Disney and Netflix,” added Packshaw.
That held true throughout the year. Amazon Prime’s ad prices hovered between $33 and $29 across the year, according to pricing data shared with Digiday. In contrast, Netflix launched its ad business with CPMs as high as $60 in 2022, before later cutting them to $29, while Disney reportedly cut its Disney+ ad rates by 10-15% in June.
Low prices made it easier for buyers to recommend streaming ads to clients according to Harry Browne, vp of TV, audio and display innovation, Tinuiti told Digiday.
“[Amazon’s move] has dropped CPMs. It’s been a great time for us as an agency, because it means that we can really lean into streaming for our clients. And it has led to some great opportunities for them,” he said.
Beyond undercutting
Of course, price and scale aren’t everything. Top dollar TV productions win and keep the attention of viewers, but buyers are less concerned with that. And advertisers expect proof that their ads are influencing consumers before investing serious dollar amounts.
In the U.S., Amazon Prime has developed a close relationship with Nielsen, starting in 2019 to provide third-party measurement of its audiences. But in other major ad markets, buyers remained wary of relying on the streamer’s own audience estimates. That left U.K. buyers with a “slight skepticism” of the platform, said Packshaw.
The company responded by working with Broadcasters’ Audience Research Board (BARB), the British equivalent of Nielsen from May, giving advertisers the same insights into viewer behavior as they’d get from broadcasters like ITV or Channel 4.
“They put their money where their mouth is,” said Packshaw. Months later in November, the platform launched “long term ROAS” measures in North America that promise to project the sales impact of ads run by advertisers across its ecosystem, including Prime Video, based on historic data.
Marisa Neamonitis, director of biddable media at Croud, said that’s made the service’s argument even sharper. “It really helps as you’re thinking about more granular optimizations and looking across your audiences and your ad formats, [because, without this], you really don’t have much visibility into what’s working until way after the fact,” she said.
During this time, media buyers say the streamer’s staff have been eager to court agencies and advertisers. “Compared to some other partners, they’re really very collaborative,” said Neamonitis.
In addition to those new measurement options, the service added interactive ad formats to its standard kit of 15 and 30-second options, including three shoppable units first made available to advertisers in May. The formats were put to use by several brands during the busy Thanksgiving weekend.
