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Amazon OTT Advertising: How much does it cost?
11 min read
Amazon OTT Advertising: How much does it cost?
Amazon OTT advertising, now called Amazon Streaming TV (STV) ads, transforms how brands connect with their audiences.
Advertising on Amazon OTT allows your brand’s message to be displayed on devices in every household—accurately targeted, fully viewed, and providing measurable results.
But how much does it cost, and how can you make the most of it?
This article includes everything you need to know about Amazon OTT advertising and the cost to start your first campaign.
Here’s what we have covered in this article:
- A detailed explanation of Amazon OTT (STV) ad pricing.
- Insights on its key benefits and targeting capabilities.
- Tips to maximize your ad performance.
- How Vibe simplifies OTT advertising and delivers expected results.
Let's get started!
What Are Amazon OTT (STV) Ads?
Amazon OTT advertising is a modern way for brands to reach audiences through video ads delivered on streaming platforms like Fire TV, IMDb TV, and Twitch.
These ads function like traditional TV commercials but with a digital edge. They’re non-skippable, full-screen, and appear across multiple devices, including smart TVs, desktops, and mobile phones.
Here’s why it’s exciting:
- Ads are charged per impression (CPM model), giving you control over your budget.
- You can target specific audiences based on demographics, shopping behavior, and lifestyle.
- STV ads run on premium platforms like Prime Video, ensuring a high-quality, engaged viewership.
These ads let you connect directly with ideal audiences, stream content online, and expand beyond Amazon, shifting away from cable TV.
Now that you understand what Amazon OTT ads are, let's dive into how they work and what makes them unique.
Amazon Advanced Targeting Options
Amazon offers a variety of advanced targeting options that can help brands effectively reach their desired audiences.
For example, let’s explore some specific advanced targeting options Amazon offers for a toy company:
Audience Targeting
- Amazon Audiences: It helps target segments based on shopping behaviors and interests, such as users interested in family-oriented products.
- Views Remarketing: You can retarget users who viewed products but didn’t purchase.
Contextual Targeting
- Sponsored Display Ads: It lets you show ads to users browsing related categories, like children’s books or educational games.
Life Event Targeting
- Life Events: You can reach consumers experiencing significant life changes, such as new parents.
Product Targeting
- ASIN Targeting: It lets you advertise on specific product pages relevant to family-friendly toys.
- Category Targeting: You can focus on categories like "Toys & Games."
Behavioral and Interest-Based Targeting
- Behavioral Targeting: It lets you reach consumers based on previous shopping behavior, such as purchasing family movies.
Demographic Targeting
- Demographic Segmentation: You can target specific demographics, such as parents aged 25-40 in urban areas.
These strategies enable toy brands to connect with the right audiences, improving engagement with Prime Video viewers interested in family-friendly content.
How Does Amazon OTT Advertising Work?
Amazon OTT advertising allows you to purchase ads through the Amazon DSP (Demand-Side Platform) and manage where and how your ads appear.
Here’s how it works:
- Programmatic or Guaranteed Placements: You can choose between automated bidding or fixed impressions.
- Precision Targeting: Amazon uses its rich first-party data, allowing you to target by shopping habits, interests, or even specific product views.
- Full-Screen Ads: These ads appear in a non-skippable, immersive format, ensuring your message lands effectively.
Now that we understand how it works, let’s learn about the cost structure and the factors influencing your advertising spending.
Cost of Amazon OTT Advertising
The costs related to Amazon OTT ads can vary based on several factors.
Amazon OTT ads are cheaper than traditional TV ads and offer better control over ad spending while reaching growing streaming audiences.
Here’s a quick overview of the main types of ads and their associated costs:
- Sponsored Display Ads: The cost of the ads depends on your targeting options and bidding strategy. You only pay when a customer clicks on your ad, making it a performance-based option that can be budget-friendly.
- Amazon Video Ads: These ads require a minimum investment of $10,000 for self-service campaigns and $50,000 for managed services. The pricing is based on cost per impression (CPM), which reflects the cost to reach 1,000 viewers.
- Amazon Audio Ads: The cost of these ads is similar to video ads, calculated on a CPM basis.
- Amazon Posts: Amazon advertising has no charges for creating or posting these ads. This allows you to engage with customers without incurring additional costs.
Factors Influencing Costs
Several elements can impact the overall cost of your Amazon advertising campaigns:
- Competition: Targeting highly competitive keywords often leads to higher costs. If you’re in a crowded market, be prepared to adjust your budget accordingly.
- Budget: Your total budget directly influences how far your campaign can go. Setting a realistic budget helps in maximizing your ad performance without overspending.
- Ad Format and Placement: The format of your ads and where they appear can also affect pricing. For instance, ads placed on premium platforms like Prime Video may come at a higher cost compared to placements on IMDb TV or Twitch.
- Audience Segmentation: Targeting specific niche groups can increase costs but often results in better engagement and conversion rates.
- Ad Length: Longer ads incur higher costs due to increased viewer engagement time.
- Frequency: Repeatedly showing your ad to the same audience can increase expenses but may enhance brand recall.
While the costs associated with Amazon OTT advertising can vary widely based on multiple factors, careful planning and strategic targeting can lead to significant value.
Benefits of Amazon OTT Advertising
Why should you consider Amazon OTT advertising? Let’s count the ways.
- Precision Targeting: You can focus on factors like shopping habits, interests, or even specific products they’ve viewed.
- Guaranteed Viewership: STV ads are non-skippable, ensuring viewers see your message fully.
- Attract New Customers: Studies show that 57% of purchases influenced by STV ads are from new-to-brand customers.
- Cost Efficiency: Compared to traditional TV ads, OTT advertising offers better results at a lower price.
- Multi-Device Reach: Your ads appear across TVs, desktops, and mobile devices, ensuring maximum exposure.
OTT advertising can expand your reach and connect meaningfully with your audiences.
Best Practices for Amazon OTT Ads
Creating Amazon OTT ads requires strategic planning and attention to detail. It is essential to ensure that your ads are effective and deliver results by following these tips:
- Clear Message: You must use concise and straightforward language and keep the focus on your core message without overwhelming viewers.
- High-Quality Video Content: This ensures your ad is visually appealing and optimized for streaming to maintain clarity and quality.
- Call-to-Action (CTA): You should encourage viewers to take action, whether it’s visiting your website, making a purchase, or signing up for a trial.
- Targeting the Right Audience: This includes using Amazon’s advanced tools to reach specific demographics, interests, and behaviors.
- Regular Testing and Optimization: Performance monitoring helps you identify areas for improvement, making your campaigns more effective.
Following these practices will make your Amazon OTT ads more impactful and drive your desired results.
Amazon OTT ads are effective, but exploring additional channels can amplify your reach and impact.
Vibe offers a platform for streaming and connected TV advertising with access to over 500+ apps and channels, tailored to diverse needs.
For example, a fitness brand can advertise on premium sports channels like ESPN through Vibe, reaching a highly relevant audience.
With Vibe, your ads align with the right content, maximizing engagement and results.
How Vibe Simplifies Streaming TV and Connected TV Advertising
Vibe is a platform focused on streaming and connected TV advertising, designed to help manage various aspects of your TV advertising campaigns.
From ad creation to performance tracking, it offers a comprehensive solution.
Here’s a look at how Vibe simplifies the process:
- Creative Studio: You can quickly design high-quality ads optimized for all devices.
- Advanced Targeting: Vibe lets you utilize advanced targeting tools to refine your audience accurately.
- Real-Time Performance Tracking: You can monitor metrics like impressions and completion rates to make data-driven decisions.
- Budget Management Tools: It helps you ensure every dollar you spend delivers maximum ROI.
- Sequential Messaging: It lets you build engaging multi-ad narratives that tell a story and keep viewers hooked.
With Vibe, you can streamline your workflow, simplify complex processes, and build campaigns designed to achieve measurable results.
Optimizing Amazon OTT campaigns requires strategy—test creatives, track metrics, and refine targeting to guide viewers from awareness to action.
Addressing Common Misconceptions About OTT
Many believe that over-the-top (OTT) advertising is expensive and only for large brands.
However, OTT platforms provide flexible pricing and targeting options that benefit businesses of all sizes.
You can effectively reach niche audiences without overspending if you have a small brand.
Amazon OTT Ads Vs. Traditional TV Ads
| Feature | Amazon OTT Ads | Traditional TV Ads |
|---|---|---|
| Cost Efficiency | Cost-efficient with flexible budgeting | High costs with fixed pricing |
| Audience Targeting | Highly targeted based on demographics, interests, and behaviors | Limited targeting, mainly based on channel and time slot |
| Analytics | Detailed real-time analytics for campaign performance | Basic analytics like GRPs (Gross Rating Points) |
| Flexibility | High flexibility to modify campaigns on the go | Rigid structure with less room for adjustments |
| Reach | Reaches streaming audiences across devices | Reaches a broad, non-specific audiences |
Conclusion
Amazon OTT advertising, now Streaming TV ads, offers brands a way to connect with niche audiences through non-skippable, data-driven video ads.
With advanced targeting, cost-effective pricing, and access to premium platforms, these ads ensure your message reaches the right people at the right time.
With tools like Vibe, managing OTT campaigns becomes more streamlined and efficient.
From creative management to real-time analytics, Vibe supports you in crafting impactful OTT ads that connect with the right audience on their preferred devices at the optimal time.
Get started with Amazon OTT ads to reach your audience where it matters.
FAQs
- What are the first steps to start with Amazon OTT advertising?
To begin your Amazon OTT advertising journey, outline your campaign goals, such as increasing brand visibility or driving website visits.
Next, identify key performance indicators (KPIs) to measure success and ensure your objectives are clear and measurable.
- What ad formats are available for Amazon OTT ads?
Amazon OTT ads support various formats, such as clickable ads for direct interaction and conversion-optimized ads to boost sales.
They also include ad types like pre-roll, mid-roll, and post-roll ads.
- What are examples of OTT platforms?
Popular OTT platforms include Netflix, Hulu, Amazon Prime Video, Disney+, and HBO Max, offering a mix of movies, TV shows, and original content.
- What is the difference between OTT and CTV?
OTT refers to video content delivered over the internet, while CTV (connected TV) is the device—like a smart TV or streaming device—used to access that OTT content.
In short, OTT is the content, and CTV is how you view it.
- How to Measure Success with OTT Advertising?
Success in OTT advertising can be measured using metrics like audience engagement, monthly active users (MAU), completion rates, and click-through rates (CTR).
Utilizing audience split tests and geo-matched-market tests also helps assess campaigns' incremental impact, enabling advertisers to optimize their strategies for better ROI.
- Who Is Eligible for Amazon OTT Ads?
Eligibility for Amazon OTT ads includes 1P (first-party) and 3P (third-party) sellers and marketing agencies.
Self-service brands can set their budgets, while managed services require a minimum spend of $15,000, which may not suit all sellers.
Amazon also offers various advertising options to accommodate different budgets.
