IPG Mediabrands strikes deal with Amazon for ad-supported streaming

IPG Mediabrands strikes deal with Amazon for ad-supported streaming

Dive Brief:

  • IPG Mediabrands has signed on as the first major agency holding company to work with Amazon on the upcoming launch of the ad-supported version of its Prime Video streaming service launching in 2024, the e-commerce giant said in a company blog.
  • The three-year deal will provide IPG with first-look opportunities at new ad formats and content sponsorships. The deal also includes access to Amazon’s first-party shopping and entertainment insights to support relevant ad experiences.
  • As ad-supported streaming offerings proliferate, Amazon’s is expected to reach an estimated 115 million monthly viewers in the U.S. alone, according to the company. Programming will have “meaningfully fewer ads” than traditional TV and other services, it said.

Dive Insight:

Amazon’s fledgling ad-supported offering gains a large stable of potential advertisers via the three-year deal, giving it an opportunity to come out of the gate strong when it launches in 2024 with plans to roll out to nine international markets. While most streaming services already have their ad-supported services up and running, Amazon is promising greater reach and frequency through its offering than its competitors and will need to prove its point.

“When we begin introducing limited ads into Prime Video shows and movies, Prime Video will be one of the largest premium ad-supported services in most countries where we operate,” said Alan Moss, vice president of global sales for Amazon Ads, in a post announcing the partnership. “This means we can simultaneously offer brands unmatched reach and frequency to help them achieve their business goals.”

Amazon plans to launch its ad-supported streaming option in early 2024, beginning with the United States, the United Kingdom, Germany and Canada. It will roll out to five other countries — France, Italy, Spain, Mexico and Australia — throughout 2024. With its large general audience of both streaming viewers and consumers, Amazon’s strength is its first-party consumer data and its ability to provide full-funnel experiences. In a recent report, Magna, which is a unit of IPG Mediabrands, called Amazon’s offering “a game-changer” for advertising-supported video on demand (AVOD). 

“Amazon’s latest offering brings a first-to-market opportunity for our clients to reach consumers at the category level in a comprehensive, scalable way — from culture and content to commerce and shoppable experiences,” said Eileen Kiernan, global CEO of IPG Mediabrands, in a statement.

Even so, Amazon’s Prime Video is the last major streaming service to launch an ad-supported tier, and it may have a lot of ground to make up. When Disney+ launched its ad-supported tier last December, Disney had enlisted more than 100 advertisers and made agreements with all the major holding companies to advertise on its platform. The streamer recently added a number of new features to its ad-supported tier, including advanced audience targeting, additional programmatic marketplaces, expanded ad formats and enriched measurement.

Netflix, meanwhile, launched its Netflix Basic with Ads subscription offering last November with partnerships with DoubleVerify, Integral Ad Science and Nielsen to help brands track campaign success. Netflix executives have said that the per-member economics of its ad-supported tier are stronger than the ad-free plan in the U.S. but offered few details about those metrics. The offering reached 1 million monthly subscribers last March.

At the same time, consumers are demonstrating some fatigue with ad-supported content, which accounted for 53.7% of the time consumers spent watching content, down from 58.5% in 2017, PQ Media’s Global Consumer Media Usage Forecast found.

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