Amazon is working on a pilot program to sell ads for top Fire TV apps. And it wants to partner with the biggest broadcast and cable networks.
The program could be transformative for the TV ad industry, given Amazon’s powerful targeting data.
But TV networks may prove resistant, given their reluctance to give up advertising control to outsiders.
Amazon wants a bigger piece of the TV advertising business.
The question is, will TV’s giants let the ruthlessly efficient e-commerce behemoth into their highly lucrative, highly exclusive world?
As Business Insider has reported, Amazon has been working building out an ad network for TV apps within its Fire TV system — very much like Roku. In fact, Amazon has been asking small and mid-sized video apps to supply 30% of their ad inventory on Fire TV devices in exchange for distribution.
Now, Amazon is putting together a pilot program with select video apps along the lines of Crackle, Tubi and Pluto to sell ad space using Amazon’s powerful data sets, said people familiar with the matter. And Amazon would like big TV companies like Fox, NBCUniversal and Hulu to be part of the pilot.
That would be a marked change for the TV business, where TV networks do not traditionally allow third parties to sell their valuable ad inventory. In fact, the biggest TV players typically sell the vast majority of their linear ad space in an annual upfront sales bonanza to a few hundred national advertisers.
But OTT is changing things. Devices manufacturers like Roku, Xbox and Amazon control the new TV delivery systems ecosystems much like cable companies have in the past.
In Amazon’s case, the company can offer TV networks a compelling two-pronged argument:
With our data, we can target customer-specific customers, since we know who our customers are and what they like to buy.
Our data will also let you know if your ads work — that is, if people end up buying things on Amazon after seeing ads.
It’s bound to be an intriguing pitch. Amazon could claim that it can help TV companies more money from OTT advertising than they can on their own — theoretically.
“This would almost certainly be big if they can get it going,” said one ad buyer.
“It could really change TV,” said another.
But they’d have to be open to partnering — not something the TV business is famous for.
Fire is so hot right now
Amazon’s Fire TV device was one of its hottest sellers during the company’s recent Prime Day event. And according to The Information, Amazon is preparing to roll out its own free, ad-supported Fire app featuring old content.
Getting access to TV networks’ owned and operated TV app ad space could be game-changing.
“I believe that a fully built out and ad-supported Fire TV product could have an enormous disruptive impact on the TV and video ad ecosystem,” said Dave Morgan, CEO of the TV ad targeting firm Simulmedia.
That also means relinquishing control in an industry known for its small cadre of high powered sellers and …read more
Source:: Business Insider – Tech