Amazon. Can you imagine one of the largest companies in the world would struggle to bring advertisers on their platform? Well, a lot of people could and it is indeed happening.
Amazon’s efforts to attract advertisers to Prime Video are meeting with challenges, particularly against the face of Netflix and Disney+. While Amazon has been aggressively escorting advertisers and seeking commitments of over $100 million, it appears that some of its larger requests have not been well-received by advertisers. In fact, some ad executives have expressed that Amazon’s demands are excessively high, equating to annual spending commitments that rival their expenditures on other platforms like Hulu.
The struggle for Amazon is compounded by the fact that it entered the ad-supported streaming market later than its major competitors. While Amazon’s broader ad ecosystem does give it a unique edge, it is playing catch-up when it comes to attracting ad spending in the streaming space. The highly competitive nature of the market, coupled with record-high CPMs poses a challenge for the company in achieving its spending goals.
Amazon’s approach to tap into its existing pool of advertisers who purchase e-commerce ads is an interesting strategy. By offering to produce advertisements for smaller advertisers who commit to buying ad space on platforms like Twitch and Freevee, Amazon aims to introduce new spenders to the format. This approach is an attempt to leverage its thousands of existing advertising spenders and generate video ad revenues.
While Amazon faces challenges in attracting advertisers to Prime Video, the platform presents an opportunity to diversify its advertising revenue sources. By offering credits and covering ad production costs for smaller advertisers, Amazon can introduce them to a new spending channel.
Well, let’s wait to see how Amazon deals with this problem.