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 [email protected]
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