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Amazon CEO Jeff Bezos
- Amazon wants a piece of OTT advertising and is targeting advertisers who are migrating from TV's $70 billion market.
- Business Insider obtained a recent pitch deck that Amazon is using to sell advertisers on its data and growing inventory in Fire TV, IMDB's FreeDive and livestreaming for broadcasts like the NFL's Thursday Night Football to advertisers.
- According to Amazon's pitch deck, 80% of Fire TV owners also have a Prime account, suggesting that Amazon wants to pitch advertisers who target higher-income consumers.
- Two sources said Amazon's video ad tech still lags rivals like Google and The Trade Desk, though.
Amazon is on a crusade to build a video advertising business that rivals Roku, Hulu, and others.
In addition to spending billions on original content for its Prime video streaming service, Amazon's been ramping up app advertising in Amazon Fire, its OTT device. It's also pushing pre-roll ads in FreeDive, its 4-month-old streaming service for IMDB.
"They go through the narrative of 'more viewers want free content' and free content comes with ads - just like YouTube," said an agency CEO. "They're trying to help you understand that people are cutting cords and they're leveraging third-party devices and apps."
Amazon also touts its ability to cap ad frequency. A second agency said Amazon boasts it can limit an ad to once per month, addressing a common marketer complaint that their ads get shown excessively, turning off viewers.
An Amazon spokesperson did not immediately respond to a request for comment.
Read more: Inside Amazon's charm offensive to win over big brand budgets from Madison Avenue
Most of Amazon's ad business comes from ads sold on its website, including keyword-based search ads. With Amazon's OTT ads, advertisers can create audience segments, said an agency exec.
"Most of Amazon targeting has largely been based on product adjacency, but with OTT, they allow interest-based targeting," said the source. "We can target for just about anything and build out lookalike audiences."
Amazon's ad-tech lags the programmatic industry
The company has its own tech that allows brands to run programmatic ads in its streaming services through a demand-side platform. Amazon also sells a portion of publishers' ads in their OTT apps, taking a reported 30% cut of ad sales.
Two sources - an ad-tech company that sells OTT ads and an agency that focuses on programmatic advertising -said DSP isn't as sophisticated as The Trade Desk or Google - the two biggest programmatic DSPs. One ad-tech exec whose company sells ad inventory in Amazon's apps said that today, one-tenth of clients' spend goes to Amazon versus The Trade Desk. The exec predicted that the gap will get smaller because of Amazon's first-party and attribution data, though.
"If you look at it purely in terms of technology, it's going to take them years to catch up," said a second agency exec. "If you look at in terms of the budgets they're stealing, they're already a big threat."
Business Insider obtained a pitch deck that Amazon has been presenting to agencies in the past few months to pitch OTT advertising. In the deck, Amazon is playing up its 30 million monthly active users and its Amazon Prime users as a lucrative audience for marketers. The deck also touts Amazon's data and measurement capabilities.
Here's how Amazon is pitching its video advertisements.
