Callum Wells and Luke Creeley.
Positive signs are emerging for Amazon Prime Video, six months into the streaming service starting to display advertising in Australia.
While the local number of advertisers onboarded onto the service is unknown, Amazon’s overall ad business generated $14.3 billion worth of revenue in the September quarter of last year, an almost 19% lift on the same three months the year prior.
For media agencies, yet another SVOD service entering into an already crowded market could have caused confusion rather than cheers, but Yango’s media director Luke Creeley said Amazon Prime Video has been a great addition to the agency’s video-offering, driving high engagement and completion rates.
“It has also allowed us to expand on existing BVOD platforms and drive incremental reach on top of other SVOD activity in Netflix, Paramount and Foxtel, amongst others,” he said.
“Given we are tech and platform agnostic at Yango, we were already familiar with the Amazon DSP, having previously run e-commerce activity across Amazon shopping and display and video activity across Twitch, so it was an easy transition when it came to using the platform to run video ads across Prime.”
ACMA data from 2024 found that demand for streaming services locally was growing, with nine in 10 Australians (91%) using an online service to watch video content in a given week, up from 83% in 2023.
JustWatch’s Australian SVOD market share report, released in Q4 2024, showed that while Netflix leads the market among JustWatch’s 2.3 million monthly local users, Amazon Prime Video is closely behind and holding a 5% advantage over Disney+.
UM’s senior planning director, Callum Wells, said the IPG Mediabrands-owned agency has seen a healthy appetite from clients for Amazon Prime Video’s venture into the burgeoning SVOD advertising space.
“As the market continues to see fragmentation and divergence from traditional networks and screen consumption, their entry into the advertising market was a welcome one,” he said.
Wells said that Amazon’s entry brought true scale into the ad targeted ad tier – something which has been slower to gain for other SVOD entrants in the Australian market, such as Netflix’s soft launch with a new lower cost ad tier that did not have an existing audience.
“Additionally, Amazon’s data stack and stronghold on the consumer market means there are true, data-led, full-funnel opportunities for clients,” he told AdNews.
“In one sweep, Prime enables access to high-engaging and high-attention formats on screens, and then the ability to follow consumers along their journey.”
That bodes well not only for Amazon Prime Video’s plans to move beyond being just a content producer and into a total entertainment hub for streaming, rentals and subscriptions, but also for any future strategies to forge a path to purchase from streaming advertisements.
Excluding dedicated sports services that serve ads during live sports broadcasts, there are some 2.5 million SVOD subscriptions subsidised by advertisements as of June 2024, up from around a million the year prior, Telsyte’s 2024 research into the Australian entertainment subscription market revealed.
Ad-supported subscriptions now account for 11% of the total SVOD services and close to 1 in 2 (45%) of SVOD users are interested in an advertising-supported plan, a 9% increase from 2023.
Creeley said that Prime offers a “very rich” data set to utilise when running video activity, and that by combining Prime Video’s premium content with Amazon’s first-party targeting and ad tech capabilities, Yango is able to drive significant reach and engagement for its clients.
“The brands we work with are excited to appear across this platform, as they understand the value in appearing within premium content, to an affluent audience of more than four million who are willing to pay to subscribe to this content,” he said.
One limitation that Creeley has observed, however, is an industry-wide one – that of the BVOD and SVOD ecosystem being extremely fragmented, with each publisher often partnering with just one or only a few of the available DSPs in market.
“This is the case for Amazon Prime Video, whereby we’re only able to run this activity via the Amazon DSP, while our other video activity is spread across numerous other platforms,” he said.
“Our approach allows us to access and activate across all of these platforms, however the management and optimisation of this activity is more challenging due to this fragmentation.”
UM’s Wells said that while it’s competitive, Amazon Prime Video’s CPMs do tend to float higher than other VOD competitors, something which should be considered as media spend is increasingly under the microscope for marketers.
“Another hurdle is, ironically, the fact that screens have become more fragmented,” he told AdNews.
“Will we see consumers streamline how many SVOD services they pay for? And will they favour Amazon over other market players?”
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