On September 22, Amazon revealed that in the first part of 2024, Prime Video will include limited advertisements. Amazon plans to gr...
On September
22, Amazon revealed that in the first part of 2024, Prime Video will include
limited advertisements.
Amazon plans
to gradually provide this new option for ads. Initially, subscribers in the US,
UK, Germany, and Canada will begin to see these advertising. Later in the year,
Prime Video subscribers in France, Italy, Spain, and Mexico will join.
According to
Amazon, customers in the US can remove these advertisements by paying an extra
$2.99 on top of their Prime membership subscription ($139 per year or $14.99
per month).
Amazon has
not yet revealed the cost to remove the advertisements for customers in other
nations.
Why is
Amazon acting in this way?
It's not
just Amazon that streams advertisements. There are ad-supported tiers and plans
available for Netflix, Hulu, Disney+, and HBO Max. These provide reduced costs
or additional content in exchange for watching advertisements.
Studies
predict that the global market for ad-supported video-on-demand (AVOD) will
expand at a 17.5% compound annual growth rate. The global market is currently
expected to be worth US $38.9 billion, and by 2024, it is predicted to reach a
value of over US $87.1 billion.
This
indicates that there is a great need and opportunity for this kind of service,
particularly among Gen Z and cord-cutting viewers who are more acquiescent with
advertising.
With
significant investments, Amazon has produced original series and films,
acquired the worldwide distribution rights to well-known television programs
and motion pictures, and increased the amount of material available on Prime
Video.
All the
same, mounting expenses and licensing fees are a problem, and it is facing more
competition from rival streaming services.
Through the
placement of advertisements on Prime Video, Amazon hopes to increase revenue
from both its current user base and vendors while drawing in new clients who
are searching for less expensive streaming services.
Setting
Yourself Apart from Linear TV Ads
Amazon wants
to differentiate itself from traditional linear TV by providing a more
simplified ad experience.
An hour of
linear TV advertising usually lasts for four minutes.
However,
Amazon wants to provide more "meaningful" Prime Video adverts.
By doing
this, Amazon hopes to achieve a balance between bringing in more money and
giving customers uninterrupted access.
The
advertisements are apparently shorter than those on linear TV and other
streaming TV providers, though Amazon did not say how long they were.
What does
this signify for merchants?
For viewers,
this may be annoying, but for Amazon sellers, it's excellent news.
Over 200
million people are Prime subscribers of Amazon globally, and they watch 17.11
hours of TV and movies on Prime Videos per month.
Through the
placement of advertisements on Prime Video, Amazon may reach a sizable and
devoted audience that utilizes the service frequently and respects the
suggestions made by the platform.
Amazon has
not disclosed the specifics of how the advertisements would function on Prime
Video; nevertheless, it is expected to make use of its current advertising
network, which consists of display ads, video ads, and DSP.
What
difficulties are present?
The
advantages of running ads on Prime Video are endless. However, it also faces
some difficulties that are rarely discussed.
Competition:
This presents the
first difficulty. Not only must you contend with other retailers, but Amazon as
well. They are known for pilfering high-converting products and passing them
off as their own.
Ad
Quality: Prime Video
users are used to watching excellent films and television series. To keep
viewers engaged, the advertisements that run on that platform need therefore
have a somewhat good production quality. This could drive up your advertising
expenses.
Compliance:Last but not least, there is compliance. Amazon already has extensive policies in place for its brands, sponsored products, and display advertisements. Additionally, their rules for Prime Video advertising will be comparable to or even stricter. In order to prevent their ads from being rejected or deleted by Amazon, sellers must read and follow these instructions.
Final
Words
The move by
Amazon to include advertisements in Prime Video is revolutionizing the
streaming services sector.
Amazon has
not released any policies for advertisements on Prime Video. Thus, a great deal
of information is still unknown.
But there is
a ton of opportunity with Prime Video advertisements. It enables brands to
interact with their target market where they are most active.
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