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Prime Video’s pitch deck includes fixed CPMs and precision targeting in Amazon’s bid to advertisers

The news: Amazon is wooing advertisers with three distinct plans for its Prime Video ad-supported streaming tier that launches on January 29, according to a pitch deck viewed by Adweek.

  • The pitch details the targeting capabilities advertisers can use to leverage the extensive data insights of the tech giant. At the heart of Amazon's new advertising model are the Preferred Deal, Guaranteed Buy, and Premium Sponsorships.
  • The Preferred Deal, exclusively self-serviced via Amazon’s platform, presents the most economical option with a base CPM (cost per thousand viewers reached) of $26, allowing advertisers to harness the retailer’s vast audience data for precise targeting.
  • Guaranteed Buy and Premium Sponsorships escalate the engagement level, offering more intricate targeting options and exclusive program sponsorships at higher price points.
  • Notably, these CPMs are fixed, ensuring stability in pricing irrespective of auction dynamics.
  • Comprehensive third-party measurement partnerships, outlined in the pitch deck, offer advertisers a robust framework for assessing campaign performance, further solidifying the plan’s appeal.

Why it matters: Amazon Prime Video's upcoming ad-tier launch promises to transform the streaming industry and redefine the advertising market landscape.

  • We forecast that this year, Amazon Prime will reach 317.8 million households worldwide. Given that, the company’s entry into ad-supported streaming is poised to command a significant share of the ad market, potentially diverting billions of dollars from traditional TV and other streaming services.
  • Analysts are bullish, predicting billions in new ad revenues, underscoring the potential of Amazon's venture.

Our take: Amazon's introduction of ads in Prime Video marks a major shakeup in streaming, leveraging its pricing strategy, vast subscriber reach, and extensive ad options to potentially eclipse rivals like Netflix in the ad-supported sector.

  • However, the move extends beyond just market dominance. It signals a pivotal shift in streaming, blending premium content and live sports with targeted advertising, marrying the appeal of traditional TV with the precision of digital marketing.