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‘It could really change TV’: Amazon wants to partner with the biggest networks on a pilot program to sell ads for top Fire TV apps

‘It could really change TV’: Amazon wants to partner with the biggest networks on a pilot program to sell ads for top Fire TV apps

‘It could really change TV’: Amazon wants to partner with the biggest networks on a pilot program to sell ads for top Fire TV apps Mike Shields Sep. 13, 2018, 12:13 AM 0 facebook linkedin twitter email print NBC Amazon is  working on a pilot program to sell ads for top Fire TV apps. And…


‘It could really change TV’: Amazon wants to partner with the biggest networks on a pilot program to sell ads for top Fire TV apps

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  • 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.

Amazon Fire TV CubeAmazon

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 buyers.

Some say, not a chance. After all, the TV business, despite ratings plummeting, just enjoyed an outstanding upfront.It’s only getting harder to reach people in mass media. Why mess with things?

“It will be scary for them,” said Torrential CEO Matt Wasserlauf, a veteran digital media exec who also logged time at CBS.

Or as one consultant put it, “my guess is [NBCU sales chief Linda] Yaccarinosays, ‘yeah right. Drop dead, unless you want to write me a massive check.'”

On the other hand, TV is undoubtedly going through massive changes,and advertisers are pining for more data-driven, automated buying. Amazon could build a self-serve platform with this new offering, and let loads of brands plug in and buy ads without making a phone call, paying for a lunch or taking an ad buyer to a Knicks game.

As one former TV exec said, ‘how long can you justify having these high priced ad sales groups? If you can make more money from partnering with Amazon, even if you have to share revenue, you could automatically do it cheaper by cutting back on sales executives, dinners, lunches and splashy upfront presentations.'”

TV networks are unlikely to get rid of all their sales executives overnight. And if they partner with Amazon, it may initially be focused on smaller networks and/or limited to unsold inventory.

Some have wondered whether top TV networks may look to rent Amazon’s data rather then let Amazon get its hands on their ad space. Yet even as Amazon’s ad business has soared, the company has not shown much inclination to share any of its precious data.

Regardless, big TV companies have a big decision to make. 

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