Prime Video ads can spur new round of growth at Amazon

From Monday, brands can advertise on Amazon’s Prime Video streaming service and the e-commerce giant’s CFO expects that advertising across all its streaming properties will become an important part of the total business model.

”Advertisers are excited to access our Prime customer base,” Brian Olavsky told an earnings call, as he explained the business is looking for ways to increase advertising in Fire TV, Freevee and Twitch as well as Prime Video.

Why ads on streaming platforms matters

Many consumers aren’t signed up to streaming platforms and subscriptions alone won’t power their future growth. Research from The Trade Desk, for example, shows that almost two-thirds (63%) of Brits are open to ads in exchange for free streaming content.

The future of streaming, then, is going to depend on a hybrid approach, where platforms offer both subscription and ad-funded options. 

Takeaways 

• Advertising growth at Amazon was up 26% year-over-year, driven primarily by sponsored ads. 
• Streaming TV advertising is growing quickly from a low base, helped by a self-service option in the US that Amazon says puts this advertising within reach of any business.
• “We will not have heavy ad loads relative to network TV and other things,” said Olavsky. “And like all of our advertising, we're trying to be useful for customers.”

Key quote

“We have increasing conviction that Prime Video can be a large and profitable business on its own … And with the ads in Prime Video, we'll be able to continue investing meaningfully in content over time” – Andrew Jassy, CEO at Amazon. 

Sourced from Seeking Alpha