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Amazon Prime Video Introduces New Ad Formats
Amazon Prime Video subscribers are in for a change this broadcast year. Amazon recently announced updates to its video streaming service, introducing new ad formats designed to enhance user interaction with advertisements and promote shopping on Amazon.
Previously, in January, Prime Video streams featured commercials unless subscribers paid an additional $3 per month. As a result, enjoying ad-free content on Prime Video costs $12 per month, or $18 per month for Amazon Prime subscribers.
New Ad Formats Available
This year, Amazon has placed a significant emphasis on streaming advertisements. Subscribers who opted for Prime Video with commercials will now encounter shoppable carousel ads, interactive pause ads, and interactive brand trivia ads. Amazon stated that these new ad formats would be accessible “across the vast majority of content on Prime Video, wherever it’s streamed.” Viewers can now add advertised products to their Amazon shopping cart with each of these new formats.
Carousel ads will present a lineup of products that viewers can browse during ad breaks in shows and movies. Amazon detailed, “The ad will automatically pause to allow customers to explore and will resume when ad interaction ceases.”
Pause ads will be visible during TV shows, movies, and live sports on Prime Video. While these ad types were initially introduced by Hulu in 2019, they will now display whenever a viewer hits pause, extending the reach of ads beyond scheduled breaks.
When a program is paused, a translucent ad featuring brand messaging and imagery, along with ‘Add to Cart’ and ‘Learn More’ overlays, will appear. Advertisers can also use pause ads to collect email addresses voluntarily from viewers interested in learning more information.
Additionally, trivia-themed ads will appear during content on Prime Video, offering rewards such as Amazon shopping credits to entice viewers to make purchases.
Amazon’s Expanding Ad Business
As one of the top digital advertising firms worldwide, Amazon has expanded its focus on using its streaming service for ad space sales. Amidst the shift of ad dollars away from traditional TV platforms, streaming services aim to captivate advertisers with new interactive ad formats that promote direct shopping.
Research from Amazon in 2023 revealed that interactive ads significantly increase product page views and conversions for items sold on Amazon. However, Amazon has not released public data on the potential impact of continuous ad viewing on user experience or interest in a streaming service.
Although Amazon declared that Prime Video ads reach an average of 200 million individuals monthly, the exact number of Prime Video subscribers remains undisclosed. In 2021, Amazon reported having 200 million Prime subscribers, including Prime Video access.
In their Q1 2024 earnings report, released on April 30, Amazon stated that their ad business grew by 24 percent year-over-year. While Amazon generates most of its ad revenue from retail, Prime Video also plays a significant role in ad sales, as highlighted by CEO and president Andy Jassy.
A survey conducted by Hub Media Entertainment from January to March 2024 found that 85 percent of Prime Video subscribers watched on Amazon’s ad tier. Amazon’s ratio of ad-based versus ad-free subscribers surpasses that of other streaming services, such as Netflix and Hulu. Notably, Amazon transitioned all Prime Video subscribers to the ad tier in January, differing from the optional ad tiers introduced by competitors.
Despite its ad success, Amazon faces legal challenges over ads on Prime Video, exemplified by a pending class-action lawsuit filed by annual subscription holders.
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