Amazon Is Set To Show Ads on Prime Videos Starting 2024

Amazon announced on September 22 that Prime Video will begin showing limited ads in early 2024.

Amazon is aiming to launch this new ad feature in stages. First, they will start to show these ads to subscribers in the US, UK, Germany, and Canada. Prime Video users in France, Italy, Spain, and Mexico will follow later in the year

Amazon said that, in the US, subscribers can pay an additional $2.99 on top of their Prime membership subscription ($139 a year or $14.99/month) to get rid of these ads.

For other countries, Amazon hasn’t disclosed any pricing to get rid of the ads yet.

Why is Amazon doing this?

Amazon is not the first streaming service to show ads. Netflix, Hulu, Disney+, and HBO Max all have ad-supported tiers or plans that offer lower prices or more content in exchange for watching commercials.

According to studies, the global ad-supported video-on-demand (AVOD) market is expected to grow at a CAGR of 17.5%. Currently, the global market is valued at US $38.9 Bn and is estimated to reach a value of nearly US $87.1 Bn by 2024.

This shows a huge demand and potential for this type of service, especially among cord-cutters and Gen-Z audiences who are more willing to tolerate ads.

Amazon has invested heavily in its Prime Video content, acquiring exclusive rights to popular shows and movies, producing original series and films, and expanding its global reach.

However, it is also facing increasing competition from other streaming platforms, as well as rising costs and licensing fees.

With ads on Prime Video, Amazon is planning to generate more revenue from its existing user base as well as sellers and attract new customers who are looking for cheaper streaming options.

Differentiating from Linear TV Ads

To set itself apart from traditional linear TV, Amazon aims to offer a more streamlined ad experience.

Linear TV ads typically include approximately four minutes of ads per hour.

But Amazon aims to offer more “meaningful” advertisements for Prime Video.

With this, Amazon seeks to strike a balance between generating additional revenue and providing viewers with an uninterrupted streaming experience.

Amazon didn’t specify the length of the ads, but they are reportedly shorter than linear TV and other streaming TV services.

What does this mean for sellers?

As frustrating as it may be for viewers, it is good news for Amazon sellers.

Amazon has over 200 million Prime members worldwide, and they spend around 17.11 hours a month watching shows & movies on Prime Videos.

By showing ads on Prime Video, Amazon can expose your products and brand to a large and loyal audience who are already engaged with the platform and trust its recommendations.

Amazon has not revealed the details of how the ads will work on Prime Video, but it will likely use its existing advertising network, including display ads, video ads, and DSP, to show ads on Prime Video.

What are the challenges involved?

Advertising on Prime Video has countless benefits. But it also has some challenges that nobody talks about.

Competition: The first challenge is competition. You have to compete not only with other sellers but also Amazon itself. They have the reputation of ripping off high-converting products and selling them under their own brand.

Ad Quality: Viewers on Prime Videos are accustomed to watching high-quality movies and shows. So, the ads that appear on that platform should have a relatively high production quality to maintain engagement from the viewers. It can shoot up your advertising cost.

Compliance: Last but not least, compliance. Amazon already has massive guidelines for its sponsored products, brands, and display ads. And they will have similar or even tighter guidelines for Prime Video advertising. Sellers need to review and adhere to these guidelines to avoid having their ads rejected or removed by Amazon.

Final Thoughts

Amazon’s decision to integrate ads into Prime Video is transforming the streaming services industry.

Amazon hasn’t disclosed any guidelines regarding Prime Video ads. So, a lot of information is yet to be revealed.

However, the potential of Prime Video ads is immense. It lets brands reach their target audience, where they spend most of their time.

If you want to learn more about Amazon Advertising or want help with creating a full-funnel advertising strategy, SellerApp PPC experts can help.

We have already assisted big DTC brands like Samsung and Coca-Cola with creating full-funnel strategies. And we can do the same for you.

Schedule a call with us today!

Additional read:

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What is Amazon Product Localization?

How to Join Amazon’s Small Business Academy

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