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Amazon Plans to Start Running Commercials on Prime Videos in 2024

On September 22, Amazon revealed that in the first part of 2024, Prime Video will include limited advertisements.   Amazon plans to gr...

Prime Videos

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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