The plan is to let video ads flow automatically through the Amazon Advertising Platform to its owned-and-operated properties, which also include Fire TV and the Amazon home page, according to industry insiders familiar with the strategy. Today, Twitch sells its own ads and gives Amazon access to mostly leftover, lower-quality inventory, while brands largely consider the Amazon Ad Platform a traditional exchange with access to sites outside Amazon. But the company is dialing up the focus on properties it owns, where it has the most information on consumers—a key weapon in battling the data-rich digital duopoly.
"Twitch is still managed as a separate entity, but it's large enough and interesting enough for Amazon to start pulling it in," says an exec from an ad technology company that has worked with Amazon, speaking on condition of anonymity. "Amazon Ad Platform has become a significant player, and Amazon wants to tie the two sides of its house together."
With 100 million monthly users, according to the company, Twitch is still small compared with Google's YouTube, which has more than a billion. But Twitch and the rest of Amazon are growing, and advertisers are eager for options.
Amazon's U.S. ad revenue is expected to soar nearly 50 percent this year to $1.7 billion, according to eMarketer, and it leads Snapchat and Twitter in digital ad market share. Google and Facebook will combine for more than $45 billion in the U.S. in 2017, according to eMarketer.
A move to consolidate its supply of inventory and open it to more programmatic buying opportunities would make Amazon more attractive to advertisers already intent on ramping up spend with the platform.
Amazon's strategy echoes Google's own path with YouTube and videos across its properties. Google in 2015 made YouTube available exclusively through its DoubleClick Bid Manager and AdWords platforms. Before that, YouTube was sold through Google's ad exchange but also open to most outside sources of demand.
Twitch is still open to third-party demand sources, and that's likely to continue to keep the platform growing. Still, Amazon has an advantage as one of the platforms competing for Twitch inventory, because of its data and insights into the audience.
Outside Amazon's shopping pages, Twitch is perhaps the most attractive property for brands, with younger viewers spending hours a day watching video game streams and other millennial-focused content. And Twitch is a player for professional content, as well: Just last week, the National Basketball Association announced a deal to stream minor-league games there.
Want a new walled garden?
Amazon's ad supply chain can be confusing, meanwhile, giving brands difficulty understanding all the ways to place ads across its many properties. "We've been pushing them to make sure they are structured in a way that makes it possible to have seamless conversations across all Amazon's assets," says a digital media buying executive, speaking on condition of anonymity.
That's what's at the heart of evolving the video ad sales in Amazon Ad Platform, creating a programmatic way to buy ads while leaning on Amazon's consumer targeting capabilities to reach the desired audience.
People familiar with Amazon's plans say they're a step toward another "walled garden" ecosystem, similar to Facebook and Google, which both maintain tight controls over ad sales, technology and their data.
"Brands want to do more buying programmatically, and that means there is demand for buying all this Amazon inventory, Twitch included, in one place," the digital media buying executive says. "Amazon Ad Platform will eventually be the only mechanism to access that supply programmatically."
Amazon declined to comment for this story. But there are no plans to eliminate Twitch's own sales team, according to a person familiar with Amazon's plans.