The news: Amazon launches its ad-supported tier for Prime Video today—but before it conquers the streaming world, it might experience some growing pains.
- Its pitch deck has elicited a lukewarm response from some media buyers, prompting the company to deploy incentives to lure brands.
- The allure of a vast audience and competitive pricing initially piqued interest, but Amazon's belated venture into the ad-supported streaming market and untimely debut far from the traditional upfront buying season have tempered advertiser enthusiasm.
- Despite this, Amazon reports positive feedback from some agencies. It is rewarding highly engaged clients with additional opportunities, actively promoting ad buys with substantial bonus media and minimal commitments to attract a diverse range of brands, especially smaller advertisers who are new to video.
Moment’s pause: While some large TV advertisers are holding off until the next ad-buying cycle, Amazon has managed to secure early commitments from brands excited to expand their visibility on Prime Video.
- However, the platform's rigid ad terms, coupled with challenging market conditions, have made it a tough sell, despite lower CPM rates vis-à-vis Netflix and added incentives. Amazon's demand for significant budget commitments starkly contrasts with industry norms favoring flexibility, causing hesitation among buyers.
Why it matters: Amazon joins the growing AVOD market at a strategic moment as the industry leans more toward ad-supported models.
- The addition is set to more than double Amazon’s CTV ad revenues from $1.39 billion last year to $3.13 billion in 2024.