Amazon Prime Video with Ads to Launch with $30 CPMs
Less than two weeks into 2024, and Amazon is challenging competitors and making headlines with news of the CPMs of their upcoming Amazon Prime Video with Ads. Set to launch on January 29, Adweek reports CPMs (cost per thousand viewers) will be in the low- to mid-$30 range. This CPM is a stark difference from that which premium competition such as Netflix and Disney+ began with, which was around $50 or $60.
Code3 Programmatic Strategists anticipate news of the CPMs to be of high interest to current Amazon advertisers as well as bring in new advertisers to the platform, especially those who weren’t testing streaming due to the high cost of entry. Increased competition with Amazon entering the advertiser streaming game has stabilized CPMs, becoming more accessible to advertisers.
Another important note is that Amazon is handling their streaming ads differently from their competitors on the viewers end. Amazon Prime Video with Ads is the default for all Prime members, as opposed to competition who launched ads by trying to entice people to change their subscriptions to ad supported versions at a lower price. Many people don’t bother to check and/or change their subscriptions, so we anticipate a significant number of users to stay as ad supported consumers.
This is an important nuance, as in 2023, many other streaming platforms lost subscribers as people canceled services to save money. Netflix remained one of the few that did not lose subscribers in 2023 (after having some major fluctuations in 2022 after cracking down on password sharing). Amazon is another platform that has continued to see YOY growth in their Prime Video viewers.
$30 CPMs are fairly standard for premium content including host read podcast ads and CTV, making this easier for advertisers to include in their plans, and more enticing for them, given Amazon’s large reach. Remember that Amazon Prime covers 94.5 million households in the U.S. - all of whom will become ad-supported viewers at the end of January unless they opt out.
What Brands Should Be Doing Right Now
Streaming has been on the radar for advertisers more than ever, with so many options to choose from. However, for many brands, the $40+ CPM can’t be justified. With $30 CPMs and a massive audience reach, Amazon will likely change that. In addition to a lower cost, Amazon offers vast 1P data, something advertisers shouldn’t ignore.
So what should your brand be doing right now? First, if you haven’t yet tested streaming ads, now is the time. Set aside a testing budget for Amazon Video. The sooner you can launch, the better as getting in early can help ensure your brand is getting the exact inventory wanted. Additionally, being an early advertiser may mean your brand gets priority down the road if there are changes and/or new offerings.
Additionally, take time to think about how Amazon 1P data can help your brand across multiple channels. It goes beyond the video ads themselves, and offers brands a chance to learn more about who your brand's audience really is. The extensive 1P data can help brands hone in on their focus of existing audience and identify new audiences to target and/or which products to feature. Additionally, brands can use results on performance and apply audience insights across display/OLV and STV.
And finally, right now, brands should begin to prepare their creative. Code3 Programmatic Strategists recommend creative between :15-:30 seconds for CTV. Brands should keep a close eye on frequency to not oversaturate the same audience, aiming for 3 exposures a day across all channels.
From the right testing budget to strategy, measurements and the creative itself, launching on Amazon Prime Video with Ads can seem like a taunting task, but it's a necessary move for 2024 strategy. If you could use a strategic partner along the way, contact us today.
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