But Amazon has no intention of resting on its laurels as it continues to make a dent in the digital ad market; make no mistake, the digital behemoth now has its sights set on TV.
Consider what it brings to the table:
- The best first-party data assets in the industry, based on cross-category product search and purchase behavior
- A major digital advertising targeting and measurement platform
- Leadership in voice technology and hardware adoption, including smart speakers and voice-activated connected TV devices and remote controls
- The ability to introduce product samples into consumers’ homes
- A large and growing footprint of ad-supported and ad-supportable video
Put the pieces together, and it’s not hard to envision a future of advertising with Amazon as the leading player. And there will be a major reckoning, even if it takes just a 5% to 10% bite out of the TV ad market. The limiting factor for Amazon is having enough ad-supported video inventory, which can be addressed through content rights acquisition or introducing ads to Prime Video.
Consider this scenario: You're sitting on your couch to binge-watch your favorite Prime Video show, and between episodes a short video ad pops up, asking if you’re ready to re-order razor blades. Amazon already knows from your purchase history that you’re likely down to your last blade. You speak into your Kindle Fire TV remote “order now,” and a new package of blades comes in the next day, along with a product sample for a new aftershave. You try the aftershave, and you like it. The following week you receive another ad in between Prime Video episodes for that same aftershave. “Order now” you say.
This might be the closest thing to the holy grail for marketers: the ability to introduce your brand to the majority of US households, delivering a combination of branding, direct response and product experience, all in quick succession. What CMO wouldn’t want that?
Pritchard may have been hyperbolic when he spoke of a world with no ads, but it’s time to consider a world where TV ads may look, feel and act very different from what we’re used to. Meanwhile, legacy media continues to oxygenate itself on the lifeblood of upfront TV buys and GRP-driven marketing mix models, as Amazon, piece by piece, assembles the future of advertising.
Change happens slowly, then all at once. By the time Amazon’s advertising ambitions manifest, it will be too late for many in the media and advertising supply chain.
The days of TV advertising as we know it are numbered.