Amazon to Show Ads on Prime Video, Aiming For $3 Billion in Ad Revenue

By Thea Felicity

May 15, 2024 11:16 AM EDT

Amazon Prime Video
Amazon Prime Video has revealed plans to introduce innovative ad formats on its streaming platform later this year, such as ‘pause ads,’ ‘carousel ads,’ ‘trivia ads.’
(Photo : Patrick T. Fallon / AFP)

Amazon is leaping into traditional media advertising with its debut presentation at this year's Upfronts, positioning itself alongside major media networks for the first time, according to CNBC. Historically, Amazon has participated in digital-focused new fronts, but its appearance at the upfronts is deemed a "bold new strategy."

Advertising has become one of Amazon's fastest-growing and most profitable businesses, featuring celebrities, including Reese Witherspoon and Jake Gyllenhaal, to promote its new streaming content.

However, its presence at the Upfronts indicates that the e-commerce giant is ready to compete with heavyweight traditional media companies such as Disney and NBCUniversal. This move comes as advertisers increasingly allocate more of their budget to digital platforms. 

This year, spending on traditional TV ads at Upfronts is projected to grow by only 1% to $18.8 billion. In comparison, digital advertising during Upfronts and Newfronts is expected to surge by 32% to $16.5 billion.

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Amazon Ads on Prime Video

Amazon announced it would start showing ads on its Prime Video streaming service in January. It expanded its advertising offerings, including Freevee, a free streaming TV service, and Twitch, a popular livestreaming site among gamers. 

Analysts predict Amazon could generate up to $3 billion in U.S. ad revenue this year, reaching an estimated 58 million households with Prime Video ads.

Amazon's ad-supported streaming content now reaches 175 million U.S. viewers monthly, up from over 120 million in 2021. Prime Video has 200 million global customers, with 115 million in the U.S.

During the Upfronts, Amazon executives showcased a strong programming slate and pressed the company's ability to use "billions of customer signals" to target ads effectively. 

READ MORE: Amazon, Google Suspend Green Card Applications Amid Mass Layoffs in IT Departments

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