Amazon rolled out two new ad products within this year’s Thursday Night Football broadcast — and internal projections estimate they will lead to almost $100 million in additional revenue, Insider has learned.
The ad units, which Amazon first introduced at the NewFronts conference in May allows an advertiser to run different versions of its ads, tailored toward the audience who is watching, simultaneously within the same time slot. For example, an auto brand can run a sports car ad to a younger crowd, an SUV spot to an outdoors audience, and a general brand commercial for the rest of the viewers of Thursday Night Football, all within the same 30-second ad position.
These new ads, called “targeted pre-sold ad slot-splitting” or “targeted copy-splitting,” are forecast to generate up to $80 million per season in new revenue for Amazon, according to an internal document obtained by Insider.
Additionally, Amazon expects another $15 million in revenue from a second but similar type of ad unit. The second ad unit is called “non-targeted pre-sold super sized ad slot-splitting” or “super copy-splitting” and it allows one ad spot to be sold to a high number of different advertisers, each running an ad in that time slot but without specific audience targeting.
Amazon thinks these new ad formats will be much more effective for advertisers and will therefore allow it to charge higher prices for them compared to traditional media ads.
“In traditional media, everybody sees the same ad creative in an ad slot, hence reduces the ROl of the ad,” the document said, referring to return on investment. “With audience targeting, advertisers can split the ad slot to display relevant targeted ads for different audience segments. Advertisers will get more returns on their ads and thus increase average CPM per ad slot and increase revenue per game.”
Amazon’s spokesperson declined to comment.
‘More differentiation’
For Amazon’s advertising unit, a $100 million in new revenue may not seem like that much. In its most recent quarter, Amazon reported over $12 billion in advertising revenue, up 26% from last year, and the unit generated $38 billion in revenue in 2022.
But these new ad units offer even more opportunity to grow.
Amazon faces stiff competition in digital advertising from Google, Meta, and traditional TV broadcasters. So, as Insider previously reported, it has been aggressively trying to grow its ad business with approaches that can help it attract brands that do not sell products on the Amazon platform.
Increasing its video ad inventory, through formats like “slot-splitting” and by its plans to increase ads in Prime Video shows, are a means to that end. In September, Amazon announced that ads will be introduced to Prime Video, unless the user pays an additional $2.99 per month.
If Amazon can “offer more differentiation in the form of audience targeting” advertisers will “pay a higher premium” on Thursday Night Football as well as other premium events, the document said.
In turn, ad revenue will justify Amazon’s investments in Prime Video. Or, as the document put it: “Advertising is going to drive ROl for this property,” meaning Prime Video.
Big brands are already taking notice. John Ghiorso, former CEO of Orca Pacific, which was acquired by the digital ads company, Media.Monks, told Insider that large advertisers that spend a lot of money on traditional TV ads are already “interested” and “actively engaging” in Amazon’s new ad format.
He said brands in the consumer package space, like food and beverage, are particularly drawn in because of the targeting capabilities, which is expected to further improve going forward.
“It’s already a massive improvement over what’s available,” Ghiorso said.
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