The video offering, via Amazon subsidiary IMDb, is the latest effort by the e-commerce giant to corner a bigger share of the $70bn TV ad market in the US, and was first reported earlier this summer by The Information.
The service is expected to be similar to The Roku Channel and some parts of Hulu. It will feature TV shows and movies, and, it’s reported, will be made available not only to Amazon Prime Video subscribers, CNBC reported, but also to the estimated 48 million consumers in the US who have Fire TV streaming devices.
According to marketing agency Merkle, brands currently spend just $7bn a year on over-the-top (OTT) services, but the figure is rising fast.
There has been growing demand for an ad-based video service from Amazon. As WARC reported in July, some major brands, such as Heineken and Pernod Ricard, were holding back on ad spending with Amazon because of a dearth of media options, in particular because of the absence of video.
While Amazon does already have video ad capabilities with Prime live sport, Fire TV, Twitch, and IMDb, the problem seems to be that much of the inventory cannot be bought through Amazon’s self-serve advertising platform. The new service will massively increase the offering.
The digital advertising market is currently dominated by Google and Facebook, which between them have 57% of the market. Amazon is now the third-largest advertising platform in the digital space, with around 4% of the market, according to eMarketer.
The new video service will allow brands to advertise between content, as well as place ads around an embedded video “player”, similar to the offering on many websites.
Crucially, it is understood that Amazon will allow marketers to access its consumer data, enabling advertising through Fire TV to be targeted for the first time.
Amazon has had discussions with at least three major media companies about bringing their programming to the new video service, according to CNBC reports. Content will include libraries of past shows and movies.
Sourced from CNBC, The Information; additional content by WARC staff