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Amazon has long been a threat to digital ad giants like Meta and Google, drawing billions of dollars in ad revenue from brands seeking to reach its massive consumer base. However, the e-commerce giant is now setting its sights on traditional media, marking a significant shift in its advertising strategy.
At this year's Upfronts, an annual advertising sales event dominated by media heavyweights such as Disney and NBCUniversal, Amazon made its debut presentation. While Amazon's Prime Video and other streaming services were traditionally featured at Newfronts, the digital media equivalent of Upfronts, the company's move to the main stage underscores its growing presence in the advertising industry.
As digital ad spending continues to outpace traditional TV advertising, Amazon is positioning itself as a formidable player in the evolving media landscape. According to eMarketer, advertisers are projected to spend approximately $18.8 billion on traditional TV ads during Upfronts this year, compared to an estimated $16.5 billion on digital advertising, representing a 32% increase from the previous year.
The rise of ad-supported streaming platforms has further transformed the advertising landscape, offering advertisers alternatives to traditional TV. Amazon's decision to introduce ads on its Prime Video streaming service earlier this year, along with offerings like Freevee and Twitch, reflects the company's commitment to expanding its advertising reach.
Alan Moss, Amazon's vice president of global ad sales, highlighted the company's customer-centric approach, stating, "At Amazon, we like to deliver for our customers. By introducing ads on Prime Video, we've created the largest ad-supported premium streaming service in the world."
With an estimated 58 million households expected to see commercials in Prime Video content, Amazon's U.S. ad revenue could reach up to $3 billion this year, according to analysts. The company's ad-supported streaming content now reaches 175 million U.S. viewers monthly, up from over 120 million in 2021.
While Amazon's advertising business continues to generate significant revenue from various ad formats across its platforms, including sponsored listings and ad spots on Fire TV streaming devices, the company is also investing in live sports programming to attract more viewers and ad dollars.
During the Upfronts presentation, Amazon executives showcased a diverse programming slate and enlisted celebrities like Reese Witherspoon and Jake Gyllenhaal to promote new original content. With a focus on leveraging customer data to target ads effectively, Amazon is poised to reshape the future of media advertising.
Paul Kotas, who leads Amazon's ad business, emphasized the company's commitment to innovation, stating, "We've been working towards this moment for years, and that's why being here on stage today means so much. And of course, at Amazon, we're never done innovating."
