News & Insights

Reach More Customers with Amazon OTT Advertising

Promoting products or services during viewers’ favorite TV shows is nothing new. But this type of video advertising has evolved dramatically in recent years thanks to the introduction of streaming video content. 

Today, many brands seek out advertising opportunities that can target specific types of consumers using a streaming service rather than buying broadcast or cable television ads. Not surprisingly, Amazon OTT advertising has become a major player due to its massive data collection and status as a streaming provider. But what can Amazon’s OTT advertising service mean for your sales? With the proper budget and a solid plan, it could be the difference between growth and getting left behind. Keep reading to learn more.  

Amazon’s over-the-top advertising

The expansion and affordability of high-speed internet, combined with the growing demand for convenience among consumers, has resulted in a proliferation of streaming video services. From Amazon Prime Video and Apple TV to Netflix and YouTube TV, there’s no shortage of alternatives to traditional tv, or what many in the advertising industry now refer to as linear tv. 

These streaming entertainment options are considered over-the-top (OTT) video content. The term reflects the fact that these streaming services bypass a traditional set-top box from a cable provider or over-the-air transmissions from local network stations. In addition to the many providers available, these services can be delivered via streaming devices like Amazon’s Fire Stick, a smart TV, gaming consoles or online platforms. 

The advertisements viewers see when streaming video content are typically called OTT ads or streaming TV ads. In the case of Amazon, they can tap into a vast database of customer data and various streaming video companies and partners to offer OTT ads that deliver a brand’s message to new, targeted audiences.

Despite their internet-connected origins, OTT streaming content is often not clickable, meaning the ads are often purchased based on impressions rather than a pay-per-click (PPC) model. However, they have the advantage of precise targeting and, in many cases, are non-skippable. These features, combined with their full-screen format, can make them a valuable tool in an advertiser’s arsenal. The Amazon OTT inventory is sold via the company’s Demand Side Platform. 

Amazon DSP Network

Amazon’s OTT offerings are a part of the Amazon Demand Side Platform (DSP). Initially introduced to advertisers as the Amazon Advertising Platform (AAP), it’s one of several Demand Side Platforms that have become popular in the online advertising industry. These tools are used to streamline and automate the buying and selling of online advertising. This programmatic approach allows advertisers and media buying agencies to bid automatically on ad inventory, including product display ads, video, mobile and search ads across multiple online properties.

Amazon’s DSP is designed to attract high-volume advertisers seeking a programmatic digital media campaign. The flexibility and reach offered by a DSP can be an efficient and cost-effective way to drive awareness and increase sales for brands with a substantial advertising budget and a clear understanding of their target audience. 

The language of streaming TV 

Like other areas of Amazon, the terminology related to OTT advertising can be confusing due to many acronyms and streaming-specific jargon. Therefore, getting a handle on the language is an essential first step to evaluating the potential of Amazon OTT. 

Advanced TV is the broad term for the delivery of streamed content to televisions and other devices. An array of acronyms fall under this umbrella, with each playing a unique role in OTT advertising opportunities. 

Connected TV, or CTV, is a device used to connect a television to the internet, making it capable of streaming video. According to Amazon, approximately 224 million people in the U.S. use a CTV, whether it’s gaming consoles, digital media players or smart TVs. 

TV Everywhere (TVE) allows viewers to stream digital television and video content regardless of location. Customers can use TVE to watch their subscription video services from multiple devices and on the go as long as they have internet access. 

Online video (OLV) ads run before, during, and after video content. OLV ads are not limited to streaming media or a particular type of device. They can be placed online within articles or websites and made a part of streaming video.

Video on demand (VOD) is video content that consumers access on their schedule rather than when the provider decides to show it. There are four main types of VOD:

  • Subscription video on demand (SVOD) – Content accessible to consumers with a subscription that provides unlimited viewing access to the particular service. Amazon Prime Video is an example of SVOD.
  • Transactional video on demand (TVOD) – This content relies on a pay-per-view model. Customers can purchase specific on-demand content, such as a movie or television episode, for repeated viewing or rent it for a limited time. 
  • Ad-based video on demand (AVOD) – AVOD is a newer type of streaming that doesn’t require a subscription or transactional fee but is ad-supported. Amazon notes that AVOD is growing in popularity, with half of US adults ages 18-44 signing up for an AVOD service in the first three months of 2020 and nearly as many planning to add another AVOD in the next year. 
  • Premium video on demand (PVOD) – This type of VOD offers premium video content from film studios and comes with higher price points than its other streaming counterparts. During the COVID-19 pandemic, some studios relied on PVOD as part of their movie premiere plans since many movie theaters were closed. 

The Advantages of OTT

Amazon OTT features extensive benefits for its users, but it’s not intended for every e-commerce brand. To determine if the service is a good fit for your company, you need to understand what it offers. 

First, because the available ad inventory spans more than just the Amazon marketplace, it can provide incredible reach. For example, ads purchased via Amazon DSP can appear on Amazon Prime videos or Amazon-owned websites such as IMBd or Twitch. In addition, Amazon devices like Amazon Fire TV and other third-party websites also offer placements as part of the Amazon DSP network. 

As a leader in DSP, Amazon can also provide better protection for your brand when participating in programmatic advertising. The company emphasizes ensuring that the ad space inventory is limited to high-quality streaming content that won’t put its advertisers’ brands at risk with questionable content or flawed traffic. You can also expect a similar commitment regarding ad viewability and dashboard reliability. 

In addition, Amazon OTT provides deep data reporting to its advertisers. These metrics can be used to manually or automatically adjust campaigns and optimize their performance. The insights can reveal ways to refine targeting, improve creative designs and tweak bid strategies to maximize budgets. In addition, the data can be a valuable path to upgrading other areas of a brand’s marketing efforts thanks to the details about customers that it can reveal.

Finally, as part of Amazon DSP, OTT advertising offers incredible targeting options. Due to the popularity of the Amazon marketplace, the company can collect a vast amount of data on the characteristics and habits of its millions of users. They can then use this information to help brands target prospective customers that match a particular profile. Amazon OTT campaigns can be targeted with countless combinations of demographics, geographic location, lifestyle interests, product interests, actions taken on Amazon and more.

Targeting Capabilities

One of the most significant advantages of Amazon OTT over other types of digital marketing lies in the ability to target the ads to specific audiences. Custom segments can be built using Amazon’s demographic and user activity data. The primary ways that a potential customer can be targeted include:

  • Contextual Targeting: Identifies shoppers who are actively viewing specified products that are related to your brand.
  • In-Market Targeting: Segments shoppers who have recently purchased or considered purchasing an Amazon product within one of the platform’s specified product categories.
  • Lifestyle Targeting: Uses search and purchasing habits to identify shoppers who fall into certain lifestyle groups, such as outdoor enthusiasts or foodies. 
  • Remarketing: A popular method of displaying ads promoting a product to people who have recently searched for, viewed or purchased that product. 
  • Audience Lookalike Targeting: Focuses on prospects who share demographic characteristics and online behaviors with a brand’s existing customers.
  • Advertiser Audience Targeting: Amazon DSP advertisers can upload a list of customers they want to target, such as those who have opted into communications with the company or otherwise provided their contact information. 

Amazon OTT Challenges

Brands that opt to pursue an Amazon OTT advertising through the company’s Demand Side Platform have two options. One is to begin a Managed-Service relationship with Amazon and let the company handle the strategy, execution and optimization. However, this path comes with a 15 percent management fee, along with the $35,000 minimum ad spend. Brands that choose this option may also have limited access to the reporting capabilities in the form of a final report on the campaign rather than real-time reporting. 

Alternatively, Amazon offers a Self-Service option to those who can spend up to $100,000 per month on the platform. Due to its high budget requirements, most sellers that pursue this route do so via an authorized Amazon marketing agency that meets the minimum spend by working with multiple advertisers. In some cases, these agencies may charge a management fee below Amazon’s 15 percent option, adding to their value. In addition, accessing the self-service option through an agency or a hefty ad commitment puts brands in complete control of their Amazon DSP campaigns.

In addition to the high costs associated with Amazon OTT, maximizing the results of a streaming advertising campaign is not for advertising novices. While it’s not all that different from evaluating and adjusting other forms of digital advertising, it’s critical to know which audiences you are reaching and how to enhance the campaign with other marketing efforts. 

Amazon OTT advertising can be much more data-driven than traditional television advertising. Rather than relying on viewer metrics from the cable or satellite provider, advertisers can take advantage of more comprehensive insights about who is viewing ads and the activity that preceded or followed their interaction with the pitch. 

Since OTT advertising appears alongside the prospective customer’s primary content, it’s also important to target streaming content that supports the company’s brand rather than only focusing solely on insights into the viewers. Finally, streaming TV ads should make the most of the fact that much of the audience will have instant internet access from the streaming device. A clear call to action, such as a push to a website, that capitalizes on these circumstances is an effective but overlooked strategy. 

Maximize your reach with Amify

OTT video advertising is just one of many ways to get your product in front of the right audience. Boosting your Amazon sales requires a comprehensive plan for optimization, marketing and fulfillment. Start building a winning strategy for your brand with help from the experts at Amify. Contact us today to learn more.