Amazon Prime's ad-supported tier drives down ad prices

Published: Jun 17, 2024 Duration: 00:03:23 Category: News & Politics

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Prime video's ad supported pay structure strategy first launched back in January is having a major impact on competitors negotiations Amazon driving down the price of ads across all streamers and networks for more we want to bring in our very own Alexandra canal and Ally what is what is I guess some of the trends that we're seeing within the ad space because of Amazon's offering well there's a few things at play here one is the fact that we have those newer entrance in the ad supported space so thank Netflix Disney plus remember they only launched their ad supported tiers less than two years ago so already we're seeing this connected TV advertising landscape automatically starting to expand and then in January like you mentioned we had Amazon roll out its pre advertising on its Prime video Service as the default option so you were automatically enrolled in Those ads and at the time mfet Nathanson described it as quote a 500 PB gorilla enters the arena and now six months later we're starting to see that disruption begin to play out here analyst Michael Nathanson he previously estimated that Prime video could add over 50 billion Impressions to the CTV Market in 2024 and that amount is not only going to dwarf some of those smaller players it's also going to increase inventory across the board and as a result that drives down prices and we're already seeing that play out with companies like Netflix The Wall Street Journal did report that Netflix is asking some Brands to pay about $29 to $35 to reach 1,000 viewers and that's a pretty sizable de increase from the $39 to $45 it charged last summer to some advertisers and one of the reasons there is because Amazon is charging a similar amount uh but we're seeing this increased scalability across the board yaho fining did have a chance to speak with Disney about this their Global president of advertising Rita phoh at can she spoke a little bit about this big Tech disruption so I want to uh uh hear a bit more of what she has to say there there's no question it's created an excess of Supply in the marketplace that for a marketer you have to figure out where am I going to spend my dollars what's the right partner to do that with and I think that's where the combination of creativity and Technology really meets to really deliver on the outcomes Disney competes with Amazon Google and everybody else and so you know to me the big the big share is still YouTube right like you you just have to look at their earnings every quarter I think we we have done an extraordinary job because we have scale and we have premium storytelling and brands that everyone recognizes so YouTube Amazon a lot of those big Tech names that we talk about it's impacting some of those more traditional players there now Nathanson is forecasting that total advertising streaming will grow 33% this year that's a reacceleration from the 177% growth that we saw last year so a lot of momentum building but the platforms that are going to fall behind are the ones that have the most inventory least musthave content and worst targeting capabilities those are the companies that are most at risk when you think of a a tech giant like Amazon they have a great uh ability to Target those consumers so that's very attractive to those advertisers and definitely attractive when you consider all the content opportunities with the sports ball of it all coming up as well the ecosystem right I mean Amazon does a great job of keeping consumers in their ecosystem I went to their upfronts it was very impressive they had a lot of star power so you know it's a big competitor in this space

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