IPG Mediabrands Teams up with Amazon for Ad-Supported Streaming

Article Brief:

IPG Mediabrands has become the initial significant agency holding company to collaborate with Amazon for the impending release of the ad-supported edition of its Prime Video streaming service, scheduled to launch in 2024, as stated by the e-commerce behemoth in a corporate blog.

IPG will have first-look opportunities at new ad formats and content sponsorships through the three-year deal. Additionally, they will have access to Amazon's first-party shopping and entertainment insights to enhance ad experiences. According to Amazon, their ad-supported streaming service is expected to reach around 115 million monthly viewers in the U.S. alone, and will feature significantly fewer ads compared to traditional TV and other services.

Article Insight:

Amazon’s upcoming ad-supported platform has attracted a significant pool of potential advertisers through a three-year agreement, positioning it for a strong launch in 2024 and subsequent expansion into nine global markets. Despite the prevalence of ad-supported services among streaming platforms, Amazon is asserting its ability to deliver superior reach and frequency, setting the stage for a competitive challenge.

Alan Moss, Amazon Ads' vice president of global sales, stated in an announcement that with the introduction of limited ads into Prime Video shows and movies, Prime Video will become one of the largest premium ad-supported services in most of its operating countries. "This means we can simultaneously offer brands unmatched reach and frequency to help them achieve their business goals," he added.

Amazon is planning to launch its ad-supported streaming option in early 2024, starting with the United States, the United Kingdom, Germany, and Canada. This service will then expand to five other countries throughout the year, including France, Italy, Spain, Mexico, and Australia. With a large streaming audience and a strong consumer base, Amazon's primary strengths include its first-party consumer data and its capacity to provide comprehensive experiences. Magna, an IPG Mediabrands company, has recently referred to Amazon's offering as "a game-changer" for advertising-supported video on demand (AVOD).

Eileen Kiernan, global CEO of IPG Mediabrands, stated that Amazon's latest offering presents a unique opportunity for clients to connect with consumers at the category level in a holistic and scalable manner, spanning culture, content, commerce, and shoppable experiences.

However, Amazon's Prime Video is the most recent major streaming service to introduce an ad-supported tier, indicating that it has some catching up to do. When Disney+ launched its ad-supported tier last December, the company had already partnered with over 100 advertisers and secured agreements with all major holding companies to advertise on its platform. Disney+ has also enhanced its ad-supported tier with advanced audience targeting, additional programmatic marketplaces, expanded ad formats, and improved measurement capabilities.

Netflix introduced its Netflix Basic with Ads subscription last November, partnering with DoubleVerify, Integral Ad Science, and Nielsen to help brands measure campaign performance. The company reported that the economics of its ad-supported tier are better than the ad-free plan in the U.S., but did not provide specific details. The offering has gained 1 million monthly subscribers as of last March.

Simultaneously, consumers are showing signs of weariness with ad-supported content, which made up 53.7% of the time spent watching content, down from 58.5% in 2017, according to PQ Media’s Global Consumer Media Usage Forecast.