Amazon OTT Advertising: Can Streaming TV (STV) Ads Work for You?

Amazon OTT ads, now known as Streaming TV ads (STV), are a type of online video advertisement delivered to viewers through streaming TV and other online videos. Amazon STV ads let brands reach specific niche audiences based on what they’re watching, regardless of whether the content is streamed on a TV, desktop, or mobile device.

In this article, we’ll look into why Amazon created STV ads, how they work, and what their benefits are. But before we do that, let’s go a bit deeper into what STV ads are.

What are Streaming TV (STV, formerly Amazon OTT) ads?

Streaming TV (STV) ads play before and during content on streaming platforms. Similar to traditional television commercials, they cannot be skipped and they cannot be clicked. Streaming TV ads appear on IMDb TV, Fire TV, and 3rd party on-demand apps. Aside from utilizing popular online content Amazon STV ad targeting is more data-driven than traditional TV advertising, making it a powerful tool to connect with consumers further up the funnel.

Background: the development of STV advertising

James Bond, The New York Yankees, and the English Premier League. When Amazon makes big splashes in purchasing exclusive broadcasting rights for high-quality exclusive content, many will say,"They're doing this so we buy more paper towels."

That statement is based on the adage that a Prime subscriber spends 3.5x more on Amazon.com, and the idea that Prime Video makes the Prime subscription even more valuable for Amazon's bottom line. That was correct.  The success of the initial hits on Prime Video, like Transparent, did in fact reinforce the value of the Prime subscription, leading to more subscribers and increased GMV for Amazon's marketplace. Things have changed though. Amazon's ambitious plans for acquiring exclusive video content are not fuelled by a desired increase in subscriptions, but instead represent the next growth vector for Amazon's rapidly growing advertising business. 

The ability to purchase ads on Amazon video content (STV ads) is powered by the Amazon DSP. Initially, the Amazon DSP only allowed advertisers to programmatically purchase display ads on Amazon's owned inventory and 3rd party publishers. Over the past several years, STV capabilities have opened up for all advertisers. The means of purchasing STV ads are now similar to display: Advertisers create unique audiences via Amazon's rich, first-party shopping data. 

Amazon's 1,500+ (and growing) highly-targeted audience segments are an extremely powerful way to reach highly-qualified audiences. Some audience examples would are: sports, outdoors enthusiasts, and new parents. Once an audience is created, advertisers can then use the Amazon ADSP to decide the type of content their video ads will be served on.

How does Amazon STV (formerly OTT) advertising work?

Advertisers can buy Amazon STV ads through the Amazon DSP (demand-side platform). You’re free to specify your target audience, giving streaming TV ads a huge advantage over traditional TV advertising, which is shown to all viewers of a particular program no matter what. 

Moreover, Amazon STV ads are non-skippable, ensuring they’re viewed from start to finish. They’re also presented in a full-screen format so advertisers are free to experiment with better visuals and finer details. Think of them like traditional TV ads, but modified to fit streaming services. 

Users are charged for their Amazon STV advertising based on impressions, unlike Sponsored Ad campaigns, which charge per click.

Where do STV videos appear?

Below is a quick outline of Amazon video properties that support STV ads.

• FireTV - is a streaming video device that allows consumers to access streaming video on demand (SVOD) content such as Prime Video, Apple TV, and Netflix, and that provides access to Amazon's owned ad-supported video on demand (AVOD) content like IMDBTV and Twitch, and other AVOD content from 3rd party publishers such as TNT, Bloomberg, and Discovery.

• Prime Video - provides access to exclusive SVOD content like Fleabag and Jack Ryan via a Prime subscription. For those who do not have FireTV, it also provides access to AVOD content like IMDBTV and Sports.

• IMDB TV - AVOD movie and TV content that can be accessed via web and mobile app, and has an accompanying TV app that can be accessed via Fire TV.

• Sports - free, AVOD live content that can be accessed either via FireTV or Prime Video where consumers can watch exclusive live sports.

• Twitch - an AVOD, live streaming service that can be accessed via its web and mobile app, and has an accompanying TV app that can be accessed via Fire TV.

What are the advantages of Amazon STV (formerly Amazon OTT) advertising?

Let’s get down to brass tacks: why choose Amazon STV (formerly Amazon OTT) advertising over other types of advertisements? Here are a few solid reasons to consider adding STV ads to your marketing budget.

Precision targeting

Perhaps the biggest advantage of Amazon STV advertising is getting to hone in on your specific audience. Because the Amazon DSP lets you filter who sees your ads, you can choose precisely the type of person likely to buy your products. 

Amazon allows advertisers to choose their audience based on lifestyle, interests, shopping behavior, and more. You can filter by traditional demographics like age, income, education level, etc., or more specific interest groups such as “homeowners.” 

You can even specify shoppers who have browsed certain products. This includes people who have viewed your product page but didn’t purchase, so if you strategize correctly, you can use Amazon STV advertising to increase your Amazon conversion rates. 

On top of that, savvy marketers can cater different campaigns to different audiences simultaneously. For example, you can create separate video ads for young and old audiences, fine-tuning the language and imagery for each group to get the best reactions. You can essentially optimize an individual ad campaign for each distinct customer group you’re targeting.

Streaming TV (STV) video ads see a large share of mid- to long-term purchases

A recent Perpetua study compared three different types of ads: STV, Amazon DSP ads (excluding STV), and Amazon Sponsored Products ads. We found that 70% of STV purchases occurred within 3-14 days after first ad interaction, followed by 33% for DSP purchases (excluding STV), and only 9% for Sponsored Products.

These results reflect that STV ads, and DSP ads more generally, are effective ways to drive awareness and build mid- to long-term demand.

Break into new markets

Amazon STV advertising reaches beyond the Amazon marketplace, including popular channels like IMDb TV and Twitch. Although these viewers aren’t necessarily Amazon shoppers, you can still effectively get your name out there among your target demographics.

With the greater reach of Amazon STV advertising, brands can raise awareness and recognition on new platforms. This makes STV ads a great solution if you’re wondering how to drive external traffic to your Amazon listing.

Poach customers from competitors

One of the more interesting audience filters available via Amazon STV advertising lets you target shoppers who have viewed your competitors’ products, but have not purchased anything. Not only is this a direct connection to people interested in products similar to yours, but also you can take business out of the hands of your rivals. 

For video ads, this feature is only available on Amazon STV advertising. Depending on your marketing strategy, this could be the perfect way to communicate your value proposition to on-the-fence shoppers, like mentioning your lower prices or new features.

Streaming TV (STV) video ads see a greater share of new-to-brand customers than other Amazon ad types

Perpetua’s recent Amazon DSP Deep-Dive compared two groups of purchasers: those that have seen Amazon STV (formerly Amazon OTT) ads and those that haven’t. 

The study showed that the share of new-to-brand purchasers was higher among those customers who had seen an STV ad than those who had seen only other types of advertisements on Amazon. Among customers who were influenced by an STV ad, 57% were new-to-brand versus only 45% among customers who were not exposed to STV.

These results suggest that advertisers who use STV ads with the Amazon DSP are more likely to be successful in gaining new-to-brand customers than those that do not use STV. This is one reason why advertisers looking to introduce new customers to their brand and product portfolio often use the Amazon DSP to run Streaming TV video ads.

More cost-effective than traditional TV ads

Ironically, as the viewership of traditional TV declines, the cost of advertising rises. With that in mind, it’s a no-brainer to switch to streaming ads: cheaper, more popular, and lots of extra perks like choosing your audience and paying per impression. 

Based on the data, people will continue abandoning cable and satellite TV for streaming services, and it’s looking like traditional TV will never recover. That means streaming TV will only become more popular in the future, so it makes more sense to switch over your advertising sooner rather than later.

Is Amazon STV advertising (formerly Amazon OTT ads) right for you?

Making a streaming TV ad work for you involves expertise in a variety of different fields. For one thing, you need to understand videography and how to actually make a video that people like. You also need to understand areas like advertising, customer preferences, market positioning, and how to budget your ad spend, not to mention the intricacies of selling on Amazon in general. 

For some brands, that’s a bit overwhelming. Career retailers on Amazon may not have the extra video skills or know-how to run streaming TV ads. Even if they’re willing to try, how much time and money would it take to learn the ropes?

As a more efficient alternative, more and more Amazon sellers are enlisting managed services like Perpetua’s to help them set up Amazon Streaming TV ads. Learn more about how Perpetua’s DSP managed service can help you leverage STV ads here.