New video ad format gives brands a way to promote deals on Amazon

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Credit: Amazon

Amazon is experimenting with a new place for marketers to display video ads within otherwise static product listings.

A new "sponsored" video recently started appearing in the Prime Pantry section of Amazon, where the site's core customers stock up on grocery items. The pantry store is open to Prime members and costs an extra $5 a month on top of the $13 a month Prime customers already pay.

The pantry has a "coupons and deals" page with row after row of the typical Amazon product listings for paper towels, toiletries, cereal and the like. But amid this, Amazon has been testing a video display, labeled as an ad. Kellogg was among the first to try it for Frosted Flakes.

The video starts automatically, without the shopper needing to hit play, and does not include sound; instead it shows a 10- to 15-second silent commercial for the product.

Amazon declined to comment on the new ad sighting, and it's unclear if this will be a permanent addition to its ad offering or if it might start appearing in other areas of the site. Amazon, however, has prioritized video as an ad format, and it is leaning more on video as a way to show off products for sale on its site.

Amazon has already given brands new ways to incorporate video into their product detail pages, with highly-produced glamour shots of their goods. Brands can also put "how-to" and other informational videos on their product pages.

The e-commerce giant also recently started serving up video ads in search results. If a person searches the term "Alexa" for an Amazon Echo speaker, for example, a video of the device could pop up as a person scrolls through the results.

Kellogg declined to comment for this story. Amazon often works closely with select high-paying brands to manage their marketing and ad buying across Amazon properties. That includes the main shopping site; its Amazon Advertising platform that serves ads to sites outside of Amazon; and customized marketing for events like Prime Day.

Several advertisers reached for this story said they were not familiar with the Prime Pantry "sponsored" videos, but said, on the condition of anonymity, that Amazon has been urging them to create more video. Amazon has been talking with advertisers for months about video ads and the types of places where marketers would like to see them run.

There is a growing universe of places within Amazon's properties for video ads, including Twitch, Fire TV, IMDB, Prime Video and now product listings on the main site.

Brands are trying to figure out what formats and creative ideas are optimal for each property, because the means for driving direct sales on Amazon could be different than, say, a commercial break during Amazon Prime's National Football League livestreams.

Amazon has been making major upgrades to its advertising business for the past two years, and the effort is starting to pay off. The company generated more than $2 billion in ad revenue in both the first and second quarters of this year, and advertising is its fastest growing segment, up 132 percent year-over-year in the second quarter.

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