How brands can work with Twitch as Amazon makes its mark
Twitch is a young-skewing streaming platform, speaking in a coded internet language most adults can’t follow, but there is one area in which it's starting to grow up—advertising. As with any bleeding-edge internet community, with a raucous fanbase and a corporate parent like Amazon, there are bound to be some inter-generational skirmishes when the brands come knocking.
Amazon and Twitch are in the middle of what’s become a familiar dance, a large internet platform trying to nurture its hipper acquisition without ruining what its fanbase loves about the service in the first place. For years, Amazon kept its distance from Twitch, allowing it to explore marketing and advertising through its own ad sales team, and it still is. But as Twitch matures—and shows impressive growth—Amazon is starting to meddle. Amazon is assimilating Twitch into its ad platform.
From the perspective of marketers, the opportunities are exciting, even if they lead to some grumbling among Twitch’s vocal user base. Brands like Chipotle, Hershey and General Mills see the potential of working with Twitch to reach its audience of hardcore gaming fanatics, and now there is this new channel emerging that could tie major brand campaigns on Twitch to direct sales through the traditional online ad marketplace run by Amazon.
“We have made an announcement that we’ve joined together,” says Sarah Iooss, head of sales for the Americas at Twitch, referring to Amazon incorporating Twitch into its ad platform. “And we are going to be bringing our marketing partners the best of both worlds, and that will definitely impact how we go to market and what kind of ad products are available.”
Light the fires
In September, Amazon took its biggest steps since buying the company in 2014, bringing Twitch into the Amazon Ads Platform. So far, it’s a limited integration with marketers in Canada, Japan, Spain and Italy using the self-serve Amazon Ads Platform to place ads within Twitch.
It’s no wonder that Amazon would take a little more of a role in Twitch’s business; the video site is seeing a rush of new activity and there is always pressure to ramp up revenue. Now, there is a concerted effort to light the ad fires.
A recent advertising pitch deck (below) shows how Twitch has tried to motivate marketers with its attractive audience. It’s an audience of mainly young (70% of Twitch users are younger than 34 years old), male gamers, who are elusive and desirable for brands. The pitch deck describes all the ad formats available—including “first video impression takeover” ads that run the second a viewer opens a livestream channel (an ad format also being used by Snapchat) and the “premium video,” which are described as “ad block resistant” and “unskippable.” That kind of language could spell trouble for Twitch with its gamer audience, since it’s a community notorious for deploying ad blockers and recoiling at the site of brands.
While Twitch is mostly known for gaming, with streamers broadcasting game play to fans who follow along while live-chatting, the community has other interests. Twitch’s pitch deck highlights the multiple interests proliferating on the site—categories like music, technology, food, films and TV. There are streamers of all varieties talking politics, fashion and lifestyle, similar to YouTube stars.
Still, it’s the gaming crowd that is most appealing to brands. While gamers are known for their aversion to overt advertising, they can make loyal customers. “Esports fans have responded to surveys indicating that they would go out of their way to actively support a sponsor of their team,” wrote Maria Ripps and Michael Graham, senior analysts, in a recent investor report from Cannacord Ingenuity. “This likely increases the ROI presented by esports and attracts ad dollars.”
Twitch touts 26.6 million visitors a day in the second quarter and 159 million viewers a month. Twitch is seeing a surge in usage, especially during the COVID-19 pandemic, when more people are looking to form online communities. Twitch has an active user base of streaming video creators, members of the online “influencer” set, who are known for playing popular video games and competing in esports tournaments. They play games that most people never heard of and worship gaming stars with screen identities that are hard to follow.
There are popular action games like “Call of Duty,” “League of Legends” and “Fortnite.” There are sports games like “NBA 2K21,” and surprise hits like the recent popularity of “Among Us” and “Fall Guys.” The Twitch stars, attracting brand sponsorships, have online identities like Axion Jaxon, TeePee, DrLupo and CouRageJD.
What Twitch does not mention in the pitch is that Amazon now has access to that audience, a sure sign that ads will be more abundant.
“When a program like Amazon Advertising meets with that consumer that’s coming to Twitch, as a brand that’s really powerful data that you can use to start to show your products to specific consumers,” says Nancy McLaughlin, director of search and enterprise services on the marketplace team at Tinuiti, a digital agency that specializes in Amazon, Facebook and Google ads.
McLaughlin notes that the Amazon-Twitch ad union is only open to media buyers in select regions, but so far it shows the potential. Marketers on Amazon, which has its own booming ad business, can serve targeted ads to Twitch through the Amazon DSP—demand-side platform.
“We can now target Twitch game viewers as part of an audience that we’re building out, we can then target Twitch non-game viewers, people that are not gaming and they’re only logging on to Twitch as a viewer,” McLaughlin says.
There are indications that the ads are creeping into the platform at a noticeable velocity.
There are indications that the ads are creeping into Twitch at a noticeable velocity.
Last month, there was a small revolt among a few of Twitch’s hardcore users who started seeing unwanted ads pop up in the middle of their livestreams. It was just an ad test that placed “mid-roll” commercials within the videos in a new way, without being enabled by the person creating the video. Twitch had, until recently, only enabled mid-roll ads when the person creating the video requested them. Twitch stepped back from the test after the backlash.
“We did have a limited ad experiment where a really small number of viewers did receive mid-rolls that were initiated by Twitch, not the creators, but we are absolutely evolving that,” Iooss says. “We’re trying to create more opportunities and more innovation for our ad partners and more monetization opportunities for our streamers. So we are going to do experiments like that.”
This is the dance Twitch and Amazon need to coordinate. Can Twitch capitalize on its growing success without turning off its fanbase?
It is unclear exactly how the Amazon Ads Platform will ultimately alter the landscape of Twitch, if there will be more intrusive ad placements or if it will be a most welcome source of revenue. As on YouTube, Amazon splits ad revenue with the video creators to foster the community and keep them streaming on the site.
Besides the surprise mid-roll ads that were quickly discontinued, Twitch also released a new “ads manager” for Twitch streamers. It was another mysterious launch of an ad product for its creators that was quickly backtracked, and Twitch declined to discuss how the “ads manager” would eventually work if rolled out widely. Presumably it would give creators some ability to control how commercials appear in their livestreams.
As Twitch works out these new automated ad tools and its eventual integration into the broader Amazon advertising ecosystem, brands are already dabbling in its gaming community. Brands have two ways now to approach Twitch, one is through its in-house managed services team that has grown independent from Amazon. There are also ways to order Twitch ads through Amazon’s managed services team, and soon through Amazon’s self-serve advertising tools.
Despite the overlapping ad teams, the strategy for marketers seems clear enough. Brands can tap Twitch for more custom ad campaigns that leverage its audiences and video stars (the influencers), and they can run traditional digital media through Amazon. The campaigns could have separate goals.
Take General Mills and a recent campaign it ran on Twitch. General Mills was promoting Totino’s Takis Fuego Mini Snack Bites in a two-hour sponsored stream with DouglsRaw. That’s a long video exposures for a brand deeply integrated into the Twitch experience, where Twitch touts that the average viewers spends 40 minutes per session, according to Iooss.
“Twitch is the lead people we talk to usually when thinking about an execution on their platform and Amazon gets brought in if and when it’s applicable and part of the plan,” Kristin Atherton, who leads media strategy for General Mills.
Atherton sees the potential of being able to incorporate a highly customized sponsorship with a Twitch streamer and then leveraging Amazon ad targeting. The two sides are coming together.
“They’ve been historically pretty cautious about keeping those two entities pretty separate and not intermingling too much, especially at first,” Atherton says. “And what I will say is, they’ve always been on this journey, we’ve been hoping they would go faster. I think COVID has accelerated that journey for them, just given this at home environment that we’re in.”
Chipotle is another brand that has taken to Twitch. It has its own channel on the site with 43,000 subscribers, and it sponsors its own gaming tournament. Last month, Chipotle streamed the Chipotle Challenger Series, a tournament that racked up 1 million views in partnership with 100 Thieves, a corporate gaming syndicate that is run by some of the most popular gamers on Twitch. “They have a real authentic love for Chipotle,” says Stephanie Perdue, VP of brand marketing at Chipotle. “When we got serious about the esports space, it made sense to go to gamers who are already authentically in love and are connected to the brand.”
Perdue says Chipotle buys ads direct from the Twitch ad sales team. “We really have had a lot of success with high-impact placements and customized experiences and leveraging streamers and influencers in our marketing,” Perdue says.