Earlier this week, Amazon revealed that its Prime Video platform will begin airing ads in Canada on February 5. According to the company, the decision to add commercials to programming will enable it to increase investment in content.
There will be no change to the current subscription price of Prime memberships, although those wanting to continue with an ad-free experience will have to pony up an additional $2.99 per month. The company also said that it plans to offer “meaningfully” fewer ads than traditional TV and other streaming services.
Canadian media buyers, like Cobi Zhang, Horizon Media’s VP of media investment and activation, say that advertisers are “eager to test the waters with Prime Video.” Zhang says “clients are actively looking for opportunities to further expand into OTT/CTV” and that his agency “anticipates Prime Video to be able to offer significant scale of ad inventory right from the get-go.”
Scott Stewart, general manager of Glassroom, doesn’t expect many consumers will opt to pay more to avoid ads. “Overall, the addition of ads on Amazon Prime is a good thing for ad buyers, and will be well received by the industry.”
“Given the current demand on premium video, especially in the streaming space, why wouldn’t Amazon try to monetize an audience that is currently using its video and music streaming services for free? Amazon was very strategic in how they grew Prime audiences across their shopping and video/audio platforms and should now be able to capitalize and monetize that, based on advertiser demand for new ways to reach streaming audiences at scale,” he adds.
Amazon Prime currently reports more than 11 million monthly viewers in Canada. According to a Fall (August/September) 2023 VAM report, Amazon ranked slightly below Netflix with an 11% share of streaming hours and an impressive average weekly reach hovering around 40%, eight points higher than Netflix.
At launch, advertisers will have access to two ad formats: sponsorship of specific content with pre-roll video ads; and rotational media, which offers both pre-roll and mid-roll ads across a broader selection of content.
Diane Devries, SVP buying for Cossette Media, and her team believe that with subscriber growth to streaming services slowing, ad-supported options have become necessary to keep the content machine running.
“Our expectation of the offering would be high for Amazon, who should theoretically have the ability to share audiences and data across their properties,” she says. “This would provide beneficial differentiation to advertisers versus the competitive set. The bundling of Prime Video with the overarching Prime membership and the benefits it provides is also a positive to consumers who will continue to struggle with economic headwinds. For this reason, it is our POV that most users will recognize this benefit and tolerate the ad supported service.”
Consumers have been exposed to promotional ads on Amazon Prime Video for quite some time, says Robin LeGassicke, managing director, digital, Cairns Oneil. So brand ads may not be so jarring once they begin. LeGassicke doesn’t expect consumers to move to the ad-free option unless they really dislike the ad-supported model and that is dependant on ad load.
LeGassicke agrees with Devries that one of the key differences between Amazon Prime and other streaming services is the company’s data layers.
“Amazon is known for their robust network of channels that allows for a robust pool of consumer data. The ability to layer that into the execution from a targeting perspective means greater precision for buyers. Also, there will be robust cross channel retargeting capabilities within the Amazon network. The expectations line up to what’s being sold – premium content, ability to extend reach, quality verification through third-party tracking and robust targeting and reporting.”
