Amazon OTT Advertising: A Complete Performance Channel
Amazon over-the-top (OTT) video advertising first launched in 2019 and has quickly gained attention for its unique capabilities with Amazon’s first-party data to support both brand performance initiatives and broader reach objectives.
Here’s an overview of the meaning of OTT, why OTT advertising is an important part of a brand’s media mix, and how Amazon OTT advertising can be leveraged to support your marketing objectives.
Before you start reading about Amazon’s OTT offerings, we recommend you have a basic understanding of all OTT channels, costs, pros, and cons.
“OTT advertising and Amazon OTT, in particular, is a viable component of a brand’s performance media mix. Much more than just a branding and awareness play, it is a complete performance channel that offers scale, measurability, and data-driven targeting.”
— Jesse Math, VP of Planning and Platforms at Tinuiti
What’s the Meaning of OTT?
OTT (over-the-top) advertising refers to brand advertising on streaming TV and movies over the internet not owned by a traditional cable or provider.
This type of advertising is becoming more and more viable because of changing consumer behaviors away from traditional TV and toward digital streaming media. For brands, it’s also becoming more viable because we’ve seen various programmatic networks (such as Amazon’s OTT) become more sophisticated with targeting, attribution, and scaling capabilities.
OTT video advertisements stream through cable boxes, gaming consoles, and other connected devices, like the Amazon Fire TV stick. OTT video inventory bridges the gap between traditional television and modern digital media by allowing advertisers to apply programmatic targeting precision to streaming media.
OTT has become mainstream in recent years, especially for younger audiences, whose viewing habits have shifted from cable viewing to streaming services. About 60% of young adults say the primary way they watch TV is through streaming services.
“We see the OTT space as being ripe for two kinds of brands: TV advertisers that are looking to recapture some of the impressions and reach that are no longer available through traditional channels, and challenger brands that don’t have direct broadcast budgets but can play in the TV space for the first time through OTT.”
— Jesse Math, VP of Planning and Platforms at Tinuiti
“Consumers are moving to OTT channels. So we need to start from the perspective that OTT can work; we just need to understand how to use it to advantage.”
Savvy advertisers know that there’s an opportunity in OTT ads: OTT ad spending is predicted to hit $2 billion this year, and advertisers need to get in on that trend as soon as possible — or risk falling behind.
What is Amazon OTT Advertising?
Amazon over-the-top (OTT) advertising refers to video advertising placements across streaming TV and movies over Amazon’s DSP network.
Amazon’s Fire TV has 37 million monthly active users, making it a leading OTT platform. Amazon has seen the usage of ad-supported Fire TV apps increase over 300% in the last year. In addition to Prime Video, Fire TV includes over 50 third-party, ad-supported apps, including AMC and Pluto. Each of these apps gives advertisers more opportunities to reach their target audience via OTT ads.
These non-skippable, full-screen ads let advertisers reach millions of people across Fire TV’s growing inventory. Advertisers can target specific Amazon audiences, but keep in mind that these ads are not clickable, so success metrics should focus on brand awareness rather than clicks or direct conversions.
Amazon DSP lets advertisers programmatically buy video placements. Programmatic advertising uses data to decide which digital advertising spaces to buy and how much to pay for them. Amazon OTT advertising lets advertisers leverage the programmatic advertising and audience targeting features of Amazon DSP — with full-screen video ads.
Some of the most popular ad-supported programs and apps on Fire TV include:
- IMDb TV
- NFL Thursday Night Football
- AMC
- Pluto
What Do Amazon OTT Ads Look Like?
Amazon OTT ads appear like normal TV ads except they offer all the advantages of a digital format: they offer data-driven targeting, are trackable, and can be scaled according to your marketing and business needs.
“Amazon OTT ads are full-screen ads with sound and they are non-skippable with an average completion rate of 97%. Amazon OTT is also brand safe with licensed TV and movie content.”
— Karen Hopkins, Amazon Advertising Analyst & Consultant at Tinuiti
The Advantages of Amazon OTT
Reach a targeted audience
The insights offered through Amazon’s first-party data helps advertisers make their campaigns more targeted than a more widespread television audience. This helps brands engage with more relevant audiences, which, in turn, means that ad spend goes farther and leads to more conversions.
Amazon DSP offers audience insights to help advertisers understand and target their audience based on a variety of factors.
Amazon’s Audience Solutions let you reach audiences based on their:
- Interests and behaviors, such as specifically shopping for products in a certain category
- Demographics, such as age, income, or education level
Within the behavioral audience targeting, Amazon has three segments:
- Lifestyle segments that reflect broad interest groups (such as homeowners)
- In-market segments based on what customers have searched for or browsed
- Retargeting segments made up of Amazon shoppers who have viewed but not purchased your products
Amazon OTT ads let advertisers combine the effectiveness of digital media with the power of Amazon DSP’s audience targeting.
Build your brand on and off Amazon
Amazon’s OTT platform means you can reach your audience and build your brand both on Amazon-owned properties as well as third-party publishers within Amazon’s network.
For example, the massive growth and scale of Amazon’s Fire TV OTT inventory means that you can reach audiences across numerous apps that consumers use on Amazon’s Fire Stick.
What’s special about these consumers is that they are considered high-intent buyers with 80% of these viewers being Prime Members.
Control your spend
Amazon Publisher Services (APS) integrates directly with OTT apps to remove intermediaries and their fees. This lets advertisers see exactly what they’re paying for. OTT ads are also easier to track the success of than traditional TV advertising. According to eMarketer, the average cost-per-minute of US primetime TV ads has almost doubled over the past decade.
According to Ryan Mayward, the director of ad sales for Amazon Advertising: “Amazon DSP is not subject to the 15% supply-side fee that other DSPs are when using APS.” Advertisers using Amazon DSP can also access inventory that other DSPs can’t. “With the Fire TV inventory optimization policy, ad-enabled apps reserve 30% of their total advertising impressions for Amazon. So with Amazon DSP, you have access to more inventory, and you’re also benefitting from a more efficient supply path with no ‘tech tax’.”
Amazon OTT advertising offers advertisers plenty of shows and streaming events to advertise alongside — with more controllable ad spend. OTT lets advertisers stick to a more strategic budget and spend on a smaller scale than traditional TV ads.
How to Measure Success with OTT?
You can measure the success of your OTT initiatives much like any other performance channel: with awareness, consideration, and sales.
“The above are just some of the metrics that can be used to gauge a successful OTT campaign. With Amazon backing the data we are able to pull together a full story by leveraging OTT and a full-funnel DSP approach to watch customer growth.”
— Joseph Elmquist, Marketplace Programmatic Analyst at Tinuiti
“The awareness alone is highly impactful not only because it is highly engaging and on the center stage of your living room, but it also hits everyone in the living room!”
“The incremental reach of OTT is not something to forget about. Not only do you hit your target consumer but also everyone who is watching with them! This enables your overall impression count to be much higher along with more people now aware of your brand,” explains Elmquist.
“This is one of the best channels for initial consideration. OTT is highly impactful, and having it being targeting thought programmatic buying allows you to hit your consumer at the right time. Right place, right time is the story of programmatic and OTT takes this to the consumers TV.”
How to Get Started with Amazon OTT Advertising
You can access Amazon OTT advertising inventory through the Amazon DSP. Advertisers can link directly through Amazon’s DSP or via a partner with access to the Amazon DSP.
When setting up an Amazon DSP campaign, we recommend following these steps:
- Set goals and clear KPIs for your OTT ads: This is a viable component of your performance media mix.
- Identify your audiences: Use Amazon Audience Solutions to use a data driven approach to understand and target your audiences.
- Build out and execute your campaign
- Test, analyze, and optimize: Enable scalability and attribution.
Want to learn more?
What Is OTT Advertising? A Guide to the Future of TV Ads
What is Amazon DSP? [2020 Update]
D2Cs Learning To Use OTT In The Performance Mix
How The Hershey Company reached incremental audiences with OTT
[Webinar] Amazon OTT Advertising: How to Expand Reach and Target High-Intent Audiences
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