Prime Video Ad Tier Launching With Competitive CPMs

Prime Video's ad tier is on the way, and Amazon is trying to make advertisers and viewers an offer they can't refuse. The company is offering lower ad prices than competitors at launch Jan. 29 and projecting massive reach thanks to a plan that automatically enrolls consumers, according to several media buyers familiar with talks. Prime Video is coming to market with CPMs (cost per thousand viewers reached) in the mid-to-low $30 range, which is in line with prices for its Thursday Night Football inventory, according to two buyers with knowledge of the offering. By contrast, Netflix originally asked for a $65 CPM when it debuted its ad tier in late 2022, and HBO Max currently charges CPMs of between $33 and $53 for ads, according to Insider. "It is far more competitive with some of the more established ad tiers and well below where some of the premium competition started at launch," one buyer told Adweek, speaking on the condition of anonymity. Amazon Snags Disney Exec Jeremy Helfand to Lead Prime Video Advertising Of course, that more competitive pricing is largely due to Prime Video's massive scale, with the company projecting a reach of more than 100 million subscribers at launch, according to two buyers. However, it’s unclear if the number means individual subscribers or household members who will see the ad. Those numbers come from the ad tier automatically enrolling subscribers, with Prime subscribers required to pay an extra $2.99 per month for an ad-free experience. Prime service (including Prime Video) has over 200 million paying customers and costs $139 per year. Prime Video had no additional comment to add besides directing to an Amazon blog that noted how the ad tier will "help brands connect with audiences." The company's ad-tier projections tower over many other notable ad-tier newcomers. Roughly one year into their ad tiers, Netflix had 15 million global monthly active users on its ads plan as of November 2023, and Disney had 5.2 million subscribers for its ad tier as of Sept. 30, 2023. Neither company automatically enrolled ad tier users at launch. “It’s much more interesting than Netflix,” a second buyer said of Amazon’s offer. Inside Amazon’s pitch to advertisers Amazon Prime Video is offering third-party verification at the onset, two buyers said, partnering with firms like Nielsen and Moat. The ad tier will also offer standard demographic targeting at launch and some additional contextual and lifestyle parameters. In the future, advertisers expect to be able to find audiences using Amazon’s full arsenal of valuable data and take advantage of shoppable experiences. Perhaps helping Prime Video's infrastructure, Amazon already sells ads against other entertainment, including its Fire TV devices, free-ad-supported channel Freevee and gaming platform Twitch. Still, Prime Video is home to its most premium titles, including hit shows like The Boys, Gen V and I’m a Virgo. I’ll be shocked if any advertiser achieves those numbers. Anonymous ad buyer Like competitor ad tier launches, Prime Video will initially have more basic formats of 15-second and 30-second ads; however, the company will also let marketers exclusively sponsor some of its inventory. “The concern there is, are they stripping away supply from some of the most premium content?” the first buyer said. Offering aside, brands can only buy Prime Video on Amazon’s demand-side platform, which has the potential to rankle some. While it’s common for streamers new to advertising to start with one ad-tech provider, multiple buyers told Adweek the lack of choice limits buyers who like to do all of their purchasing through a single DSP for frequency capping purposes or due to existing relationships with other tech firms. So far, Amazon’s pitch is enticing to advertisers already eager to access previously untapped inventory, who can now do so at relatively reasonable prices. How the Biggest Streaming Services Stack Up Heading Into 2024 But streamer advertising promises of reach don’t always equate to how many people actually watch a brand’s messaging, especially in the fragmented connected TV market and with competition for premium inventory, a third buyer told Adweek. “I’ll be shocked if any advertiser achieves those numbers,” the third buyer said of Amazon’s promised reach of more than 100 million. “Even with super large budgets, it’s a huge level to hit when you’re not the top used application in the country. And turning this feature on might push people out of using [Prime Video] as much.” Time will tell if Prime Video delivers its huge ad tier projections—or if consumers simply opt to pay the extra $2.99.

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Prime Video Ad Tier CPMs 'Far More' Competitive Than Netflix's at Launch

Buyers share that Prime Video is coming to market with CPMs in the mid-to-low $30s

Catherine Perloff

Bill Bradley

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Catherine Perloff

Bill Bradley