Brands are already flocking to Prime Video’s ad tier

Amazon officially rolled out ads on Prime Video last week, and plenty of brands are already jumping on board.

The ad tier, which rolled out Jan. 29 to Prime subscribers in the US, means that existing Prime Video viewers will automatically watch with ads, unless they opt to pay $2.99 more per month to watch ad-free. Delia Marshall, president of the WPP agency Eicoff, previously told Marketing Brew that the ad inventory and targeting opportunities on the new tier are “music to the ears” of advertisers.

We took the liberty of watching TV during work to *investigate* which brands, exactly, are advertising on the new offering. In the first week that Amazon Prime Video with ads was live, we spotted pre-roll and mid-roll advertisements for brands including Chewy, Sparkling Ice, New Balance, Samsung, Tinder, and Zipcar running on episodes of Reacher, Downton Abbey, Modern Love, and Expats, as well as the movies Asteroid City and Red, White, and Royal Blue.

In most episodes, we spotted only one or two ads. On average, the ads we saw totaled almost a minute per hour of programming. Amazon has previously said that its ad tier would have “meaningfully fewer” ads than those of some of its streaming competitors.

Cash cow: Amazon’s entrance into ad-supported streaming could prove lucrative for the company; research firm MoffettNathanson projects that by 2025, Amazon may bring in around $1.7 billion in revenue from the addition of ads on Prime Video alone. Amazon, which has more than 200 million Prime subscribers worldwide, has told advertisers it expects to reach roughly 159 million global viewers monthly on the ad tier according to documents viewed by the Wall Street Journal. For reference, Netflix, which rolled out its ad-supported tier in November 2022, recently reached 23 million monthly active users on its ad-supported tier.

Amazon has one potential advantage: It’s requiring viewers to pay more to opt out of watching ads, instead of having to opt into an ad-supported tier, which some of Amazon’s competitors have done.

Cheaper by the dozen? Whether consumers embrace ad-supported viewing on Prime Video remains to be seen, but ad-free viewing continues to get pricier, perhaps incentivizing consumers to embrace the ad-supported life. Marshall said ad-supported tiers, which are generally less expensive than ad-free viewing, can “help give some relief” to cost-conscious consumers. Data released from research firm Antenna last month found that November 2023 was the first month on record where sign-ups for ad-supported tiers represented the majority of new sign-ups across “premium SVOD services.”