Amazon Prime Video will launch its ad tier on Monday, but just days before its debut, multiple media buyers say reception thus far has been lackluster and the streaming giant has needed to offer incentives to entice brands. 

Amazon’s until-now elusive TV inventory—offering perhaps the largest ad-supported audience in the premium streaming market with mature ad capabilities and at prices lower than its competitors—had media buyers salivating when it was announced last year. 

But Amazon’s timing in bringing Prime Video to market has soured the deal for some advertisers, according to media buyers.

Amazon “decided to launch [ads on Prime Video] in the worst possible time that they ever could have decided to launch a product,” said one media buyer. “They launched the product after the last [upfront] marketplace, almost directly in between then and when the next marketplace is starting, and in the worst marketplace that we’ve seen in decades.”

“We’ve seen a strong response from agencies leaning in so that their clients can be among the first brands to engage with the Prime Video streaming audience,” an Amazon spokesperson told Ad Age. “We value our ad customers and, as is common practice, occasionally thank our most engaged clients with additional opportunities.”

While Amazon’s pitch for Prime Video ads has struck some as out of touch with the current marketplace, the tech company has made increased efforts to incentivize advertisers to buy its newly launched inventory. Prime Video has offered “a significant amount of bonus media” for advertisers that buy into Prime Video and a low minimum commitment from advertisers, according to at least three media buyers.

Amazon is offering “bonus impressions you’re able to get if you are committing to spend $50,000 on Prime Video’s launch,” said a second buyer, adding that “Prime [Video] is doing upfront deals, but they’re also allowing a general release of biddable inventory at the $50,000 minimum, where you can go buy it self-serve in the platform, and test-and-learn and scale your way from there … They just want as many advertisers as possible to activate.”

But Amazon’s incentives for advertisers might not be aimed just at major brands consumers are accustomed to seeing on TV. Streaming is a small portion of the retail behemoth’s advertising ecosystem, and it is likely seeking to transition some of its non-video advertisers over to Prime Video.

“You might see a lot of random advertisers [at launch],” said the first buyer. “What [Prime Video] is going to be missing is some of the big, perennial TV players that will come with the next [upfront] market more than we’re going to see them at the jump.”

A very soft video market

Amazon announced that ads would be coming to Prime Video last September, after many TV advertisers had already set or were finalizing commitments for the 2023–2024 broadcast year. Amazon is predicting 115 million eyes on Prime Video ads, according to the tech company’s initial pitch to advertisers, because it will automatically opt-in all users for ads unless they pay a monthly fee. It is also offering the advanced data and tech capabilities Amazon has been developing for other properties such as “Thursday Night Football” and a full slate of measurement partners.

Despite that, a third media buyer said “very few” of their clients had bought in for Prime Video’s launch, with a fourth media buyer saying two of their clients had signed up. The first buyer said a handful of clients had made loose commitments, but that Amazon “didn’t get the overwhelming mini upfront that they wanted … They will certainly tout that they wrote deals, but I want to know how much is actually in their bank account versus pledged and how much chasing they will have to do over the next couple of months.”

Viewers, though, shouldn’t expect major brands to be completely absent from breaks during shows such as “Jack Ryan” and “The Marvelous Mrs. Maisel” come launch day. Last December, Amazon inked a deal with IPG Mediabrands to grant clients of agencies including Magna, UM, Initiative and MediaHub a first look at sponsorships and new ad formats. The volume of top-tier brands on Prime Video is expected to grow exponentially when upfront deals for the 2024–2025 broadcast year set in.

Netflix had a similar case of bad timing when it began pitching its ad tier post-upfront in 2022. But while Netflix came to market with CPMs, or the cost to reach 1,000 people, in the range of $60, Amazon’s $30 CPM seemed a much easier win. 

“This is a very soft video market at the moment,” said third third buyer, who said that even priced lower than competitors, Prime Video’s CPM was more than most clients could handle. “[Amazon] missed the window of the upfront and came to market where there are very few fluid dollars to be had. The softness of the marketplace means there are significant advantageous deals to be had, and they came out with a price that was too high.

“This is why they are adding all the bonus media in—they want to hold the high-priced base, but get to an effective CPM,” the third buyer added.

Related: Revisiting Netflix’s first year with ads

The third buyer also said clients were hesitant to commit dollars to Prime Video because it was offering little flexibility in its terms, “in some cases asking for 80% to 100% firm” dollar commitments from advertisers. This is a departure from what video and TV advertisers have grown accustomed to since 2020, when the onset of the pandemic necessitated the option for advertisers to spend budgets closer to air date rather than months in advance, and has long been the norm for digital platforms by IAB guidelines. 

“No client wants to lock up dollars with less flexibility,” said the third buyer.

A clear line has been drawn between the major TV players that over-index on upfront spending versus smaller brands that stick to the so-called scatter market, or short-term buying. The fourth buyer associated with an independent media agency said nearly 30 clients have leaned into Prime Video at launch.

The industry disruptor

Despite the numerous factors working against Prime Video at launch, almost all buyers agreed streaming advertising is about to be divided into the pre-Prime Video and post-Prime Video eras.

“The landscape has officially changed with Prime Video,” said the fourth buyer. “And the competition is going to have to take notice. Those who have super high CPMs and not as much scale as YouTube or Prime Video—most other streamers—they’re going to have to take a look at their offering. I know for a fact that I’m looking at the marketplace differently because of Prime Video.”

The first buyer said Prime Video’s entrance to the ad market is the opposite of Netflix’s. Netflix brought to market a high-profile pitch that, while starting from the ground floor in scale, had a clear trajectory to grow over time, incentivizing buyers to grab the best deal quickly and establish a partnership, the buyer said

Prime Video, according to the buyer, doesn’t have the same urgency for buyers, particularly given Amazon’s existing relationships with the video marketplace through “Thursday Night Football” and Freevee. The first buyer said they’re holding conversations with Amazon knowing “I'm going to go into full negotiations in May, and they have no problem with scale. I have no concerns about getting the price that I ultimately want, so I didn’t feel pressured to rush to do a deal at launch.”

The buyer said they predict upfront deals with Prime Video to come down to the low $20 range. Which would in turn put greater pressure on other streamers to lower prices as well.

“I don’t think anyone questions that Amazon Prime is going to be a terrific long-term offering in all of our futures, and that it has the potential to be truly disruptive because of the scale that they will have right off the bat,” said the buyer. “And because as a company, unlike Netflix, they’ve already proven that they understand how to do a commercial offering.”