Amazon in Talks to Sell Streaming TV Ads Outside of Fire TV
January 09 2020 - 08:09PM
Dow Jones News
By Sahil Patel
Amazon.com Inc. has been building a business selling ads on its
Fire streaming television platform. Now, it wants to sell some ads
for the first time on other streaming TV systems such as Apple TV
and Xbox, according to people familiar with the matter.
In a new initiative, Amazon is talking with TV app owners about
integrating technology to let it sell some of their ad inventory on
other streaming TV systems, which would also include PlayStation
and Android TV, according to the people.
The talks are taking place between programmers and Amazon
Publisher Services, a company division whose services include
providing tech for publishers to sell ads across platforms. Amazon
Publisher Services offers publishers a way to connect to different
sources of advertising demand, including through Amazon's own
ad-buying tool.
App owners already working with Amazon Publisher Services
include CNN, Discovery and A&E, as well as digital video
platforms such as Pluto TV and Tubi TV.
Amazon began contacting TV app owners late last year about
getting access to their ad inventory across platforms, the people
said.
Amazon uses data on shopping and browsing behavior it collects
from its own e-commerce websites and apps to target the ads it
sells on Fire TV, and would do the same on other platforms,
according to a person negotiating with the company. That targeting
would only be available to advertisers who buy ads through Amazon's
ad-buying tool.
Amazon has told publishers it can fill ads at higher prices --
as much as $40 per thousand impressions -- than other third-party
ad-selling platforms, the person said.
Many video publishers have a hard time selling all their ad
inventory on their own, said Freddie Godfrey, founder of Origin
Media Inc., which advises media companies and advertisers on
streaming TV strategy. "There is no publisher on planet Earth who
has 100% fill all of the time, so they are always trying to add a
new demand partner," he said.
Amazon has proven effective at delivering ads to publishers at
high prices, Mr. Godfrey said: "They are a good filler."
Some video programmers, especially bigger media companies with
large ad-sales operations and existing relationships with marketers
and media-buying agencies, may hesitate to hand over even more of
the inventory to Amazon.
The advertising industry expects Amazon to become increasingly
competitive with Alphabet Inc.'s Google and Facebook Inc., the
dominant ad sellers in digital advertising. Amazon already controls
an ad-buying platform used by media agencies and marketers to
connect with ad-supply platforms.
Connected TV ad spending is expected to rise to nearly $8.9
billion this year, up from $6.9 billion in 2019, according to
eMarketer.
The Fire TV platform has more than 40 million monthly active
users. An active user is defined as an account that has streamed
content on a Fire device in the last 30 days.
Gaining access to streaming-video ad inventory on other
platforms would give Amazon a larger pool of consumers to offer
marketers and a way to increase its advertising revenue.
Amazon doesn't break out ad revenue in its earnings, but
advertising makes up a majority of its "other" revenue category,
which stood at $9.3 billion through the first nine months of 2019,
compared with $6.7 billion in the same period a year earlier.
Write to Sahil Patel at Sahil.Patel@wsj.com
(END) Dow Jones Newswires
January 09, 2020 19:54 ET (00:54 GMT)
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