Why Amazon's Prime Video Ads Are Seeing Early Success With Advertisers

The early reactions from advertisers to Amazon Prime Video ads have been mixed but generally positive. Advertisers have noted early success with the platform, with some seeing a bump in sales on Amazon after testing the platform. Amazon is attracting advertisers with competitive price incentives and sponsorships, and has adjusted its initial CPM rates to be more in line with competitors like YouTube. Additionally, Amazon has over-delivered on advertisers' reach goals with its initial campaigns. However, some advertisers think the prices are still too aggressive given the current soft ad demand.

Amazon Prime Video has positioned itself strongly in the TV ad market by leveraging several strategies:

• Offering generous price incentives: Amazon has provided discounts and bonus ad impressions to attract advertisers, ensuring a diverse range of ads for viewers.
• Low adtech fees: To manage ad campaigns, Amazon has charged competitive adtech fees, making it an attractive option compared to platforms like YouTube.
• Default ad experience: By making ads the default viewing experience, Amazon ensured a large audience from the start.
• Limited ad time: Amazon is capping ads at three and a half minutes per hour, which is lower than other major streamers, balancing viewer experience with advertiser needs.
• Big sponsorships: Amazon has introduced big sponsorships and product integrations with ad-friendly programming, such as the new MrBeast reality TV show, "Beast Games."

These strategies have helped Amazon to set up Prime Video for success in the competitive TV ad market.

As Amazon Prime Video heads into the upfronts, it faces several challenges:

• High price concerns: Some advertisers believe Amazon's prices are too high, especially in a soft ad market, and they may use this as leverage to negotiate better rates.
• Increased spending requirements: There are concerns about Amazon asking advertisers to more than double their spending to run on Prime Video compared to the previous year.
• Customization and performance monitoring: Advertisers may achieve better sales results on Amazon by creating customized ads and closely monitoring their performance, which requires additional effort and resources.
• Data transparency: Amazon will need to regularly share data with advertisers about the viewership of Prime Video, including how many people are watching and for how long, to maintain trust and prove the value of their ad spend.

Despite these challenges, advertisers generally agree that Amazon is starting from a position of strength in the TV ad market.