Amazon’s pitch to ad buyers: size matters

In January, with the flip of a switch, Amazon’s Prime Video became the largest ad-supported streaming platform in the US, its executives announced Tuesday during the company’s first upfront presentation.

Its message to the advertising industry was clear: size matters.

Within the first five minutes, Mike Hopkins, SVP of Prime Video, noted that the streamer has an average ad-supported reach of 115 million monthly viewers in the US. For comparison, Netflix said earlier this year that it had 23 million monthly active users on its ad tier worldwide.

Even before introducing ads, Amazon was a formidable streamer, with its viewership in terms of total time spent falling just below YouTube, Netflix, and Hulu, per Nielsen. Amazon’s inaugural upfront was everything one might expect would wow Madison Avenue, with celebrities (hello, Jake Gyllenhaal), musical performances (good morning, Alicia Keys), and awkward one-liners delivered by executives in suits.

But Amazon ain’t like the other platforms, and its execs know it. “Here’s the critical difference—we’re not just an entertainment company trying to monetize our shows with the latest ad tech or third-party audience signals,” Tanner Elton, Amazon’s VP of US ad sales, said. “We’re the place those customers come to shop and do so much more, which means we can do things nobody else can do.”

Amazon is the OG retail media network, able to track what viewers are shopping for and searching for across its enormous online marketplace, all while its ad tech leverages “billions of customer signals,” Paul Kotas, Amazon’s SVP of ads, said. That retail focus is coming to streaming: ahead of the presentation, Prime Video announced shoppable ad formats, including interactive pause ads, for streaming TV.

As actress Keke Palmer pointed out onstage, ads can also be retargeted across Amazon’s other ad-supported properties, including Twitch, Amazon Music, Amazon Live, and FAST channels. (There was little mention of Amazon’s free ad-supported streamer, Freevee. Adweek had previously reported the platform’s closure, but Amazon denied the report. RIP Freevee…at least its relevance.

How this inventory will be bundled and priced is for advertisers and Amazon to haggle over, but buyers that Marketing Brew spoke to expect the new offerings from Amazon and growth on Netflix to soften the ad market. The unveiling of Prime Video’s ad tier alone was a “supply tsunami on the marketplace,” Hugh Scallon, SVP and head of video activation at VaynerMedia, told Marketing Brew.

“Our volume of clients that raised their hand and wanted to get in was one of the more surprising and quicker developing things that we had really ever seen in the last two years,” he said.

Star power: Amazon unveiled a star-studded slate of new programming, including a rom-com starring Will Ferrell and Reese Witherspoon called You’re Cordially Invited and a live-action spinoff of Spiderman: Into the Spiderverse starring Nicolas Cage. Following the success of mining video game IP to create Fallout, it’s releasing an adaption of Tomb Raider produced by Phoebe-Waller Bridge. Oh, and Gyllenhaal announced a sequel to Road House.

Witherspoon later closed the event, returning to the stage in character as Legally Blonde’s Elle Woods to announce a prequel to the hot-pink legal flick.

Prime Playoffs: This fall will be Prime’s third season streaming the NFL’s Thursday Night Football package, which, next season, will also include a broadcast on Black Friday and its first-ever Wild Card Playoff game (perhaps taking notes from Peacock.) It’s also streaming 21 WNBA games this season, including the debut phenom Caitlin Clark.

The negotiation table: Given the glut of streaming impressions, some buyers are expecting to get a deal. Historically, Amazon had taken a value-pricing strategy, Scallon said, although “every other agency [can] arrive at the same conclusion and try to crowd us out.”

Jasmine Sheena contributed reporting to this story.

Correction 5/16/2024: This piece has been updated to correct Mike Hopkins's title.