- Amazon introduces ads on Prime Video, instantly reaching 70 million members.
- Amazon faces challenges luring ad buys from incumbent TV and YouTube.
- Advertisers want Amazon alternatives, and sales lift data could eventually convince more to shift budgets
Ads on Prime Video
Amazon is set to shake up the streaming advertising market when it introduces commercials on Prime Video starting Monday, a move expected to drive billions in extra revenue.
The e-commerce giant can instantly reach 70 million Prime subscribers with ads now the default experience.
Wall Street analysts predict ad revenue upwards of $5 billion given Amazon’s scale, data capabilities, and dominance of retail media dollars.
Competition landscape
However, it faces stiff competition luring ad buys away from incumbent TV players and YouTube’s connected TV ads, as well as blunting Netflix’s nascent ad efforts.
Success is not guaranteed, as Prime Video accounts for just 3.3% of US TV viewing time currently.
Amazon will need to attract non-retail advertisers and make a compelling case during this spring’s upfront negotiating cycle for shifting ad budgets its way versus traditional partners like Disney and Comcast.
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Challenges and opportunities
Still, marketers are eager for Amazon alternatives and incentives like extra ad impressions could draw initial interest.
With its tech stack advantages, Amazon is betting it can eventually convince advertisers of the sales lift from Prime Video ads when precision conversion tracking comes online.
