What it is: Amazon has gained valuable insights from streaming ads on their own platform, Fire TV. Now they want to expand into networks and streaming apps owned by other companies.
What it means: If Amazon is successful with efforts to place ads on external streaming services, they will break down barriers in the OTT space, and dramatically increase their pool of inventory. Brands will also see an advantage: the ability to leverage Amazon’s massive amount of user data to target and measure ad placements on multiple streaming platforms.
Let’s dive in.
A recent article in The Wall Street Journal reports that Amazon is in talks to sell ads on streaming networks outside of its own, including Apple TV, Android TV, PlayStation and XBox. This would be a first for the company, whose focus for the past few years has been building content and audiences for its own streaming platform, Fire TV. Expanding the reach of their ad inventory would enable Amazon to expand their reach to more audiences while using its rich pool of user data to target and measure their ads.
This is a natural move for Amazon as it seeks to grow beyond Fire TV, which is now a well-established player in the so-called “streaming wars.” In mid-2019, Fire TV surpassed the viewership of popular rival network Roku, and just last week they reported 40 million active global users a month. In comparison, Roku reported 32.3 million active users in September. Both companies define active accounts as ones who have streamed content within the last 30 days.
The conversations aiming for more ad inventory are being initiated by Amazon Publisher Services, a company division that provides tech for publishers to sell ads across different streaming platforms. A number of entertainment apps are already working with Amazon Publisher Services to sell ad space, including CNN, Discovery, and A&E.
Amazon uses the massive stores of data collected from shopper and browser behavior on Amazon.com to target viewers with ads tailored to their interests. Expanding outside of Fire TV would offer the same targeting possibilities on other platforms when the ads are purchased through Amazon’s ad-buying tool.
Although Amazon may initially be met with hesitation, granting the company access to more ad inventory would have its benefits for publishers. Many video publishers have difficulties selling all their available ad space and rely on units like Amazon Publishing Services to fill in the gaps. Additionally, Amazon’s ability to strategically and accurately target certain audiences could immediately raise the value of – and demand for — remnant ad space.
A recent report from eMarketer predicts that ad spending on Connected TV will grow at a staggering pace over the next few years, surpassing $10B by 2021. As Amazon expands their audience size through Fire TV and external streaming publishers, they will break down barriers in the OTT space and begin to achieve scale outside of the confines of owned platforms.