Marketers have gotten their first glimpse into Amazon’s Prime Video ads program, which launches next year and thrusts tens of millions of viewers into a commercial tier of connected TV, unlocking a haul of streaming ad inventory for brands.

In a new pitch deck, recently sent to major advertising holding companies and obtained by Ad Age, Amazon expects Prime Video ads will hit 115 million people in the U.S. monthly, and that advertisers can reserve inventory upfront with “premium sponsorships,” “guaranteed buys” and “preferred deals.”

Last week, Amazon announced that it would launch Prime Video with ads, inserting commercials into the entire platform instead of just the few corners that carried ads previously. Amazon already runs ads on “Thursday Night Football,” which it started streaming exclusively last year, and within Freevee, which is an ad-supported platform that also has a home in Prime Video. Soon, Prime subscribers will see ads in Amazon Originals, such as “The Lord of the Rings: The Rings of Power,” unless they pay an additional fee. The Prime Video ad tier is a whole other level for the company’s advertising ambitions, according to media buyers.

“Compared to Netflix, this offering is mature,” said one top digital ad executive, who spoke with Ad Age on condition of anonymity. “It will have mass reach to start and depending on what they finally come out with on price, it will probably be a recommended buy from us.”

Several media buyers spoke with Ad Age on condition of anonymity because they were in the middle of negotiations with Amazon to incorporate Prime Video ads into their buys next year.

Pricing has not been set, but according to Amazon’s pitch deck, the e-commerce giant is offering “guaranteed buys,” which is TV advertising-speak for consistent pricing and predictable audience sizes. Amazon can likely guarantee more ad inventory because it will automatically enroll all Prime subscribers into its ad tier unless the customers pay more. For now, Amazon Prime costs $139 a year; for those who want to avoid ads, the annual cost will increase to $175. 

Priced to sell

Amazon’s move into Prime Video ads is another salvo in the streaming wars, as major TV networks, including Disney, NBCUniversal, Warner Bros. Discovery and Paramount have all launched connected TV apps with ad-supported models. YouTube, with YouTube TV, has been garnering a larger share of TV viewing too, in living rooms, and last year Netflix launched its first ad-supported service.

Netflix’s entry into ads generated excitement among brands who are eager to appear in prestige programming, such as “Stranger Things.” Netflix has 238 million subscribers worldwide, and bragged at its May upfront presentation that its ad tier drew 5 million global monthly active users. Ad Age reported in August the number of Netflix’s U.S. ad-supported subscribers was just shy of 2 million. 

Negotiations between top advertisers and streaming services have been fraught at times, with the high price of inventory when a new platform introduces advertising to the market. But early talks with agencies have left buyers feeling optimistic that Prime Video may price its ads more sensibly, at least by their standards.

Read about Amazon’s Newfront presentation

“[Amazon] told us they will not make the same mistakes that others before them have made,” said the media buyer who has held discussions with Amazon sales reps. “They've been watching,” meaning they won’t come to market with a CPM—cost per 1,000 views—comparable to Netflix or Max (owned by Warner Bros. Discovery), which the buyer placed at $50-plus. “We think [Amazon is] going to come in, practically speaking, mid- to high-$30s,” said the buyer.

The media buyer said Amazon’s launch strategy for Prime Video ads—automatically opting users into ad-supported viewing unless they pay an additional fee—is a differentiator among the crowded streaming and digital video market. “[Amazon’s] offering is going to have significant reach because they’re forcing people to opt out of ads and pay an additional $2.99,” said the buyer. “It’s going to take at least a couple months for people to even realize that they’re seeing ads and then to figure out how to opt out.”

Shopping for shoppers

Amazon’s pitch deck emphasizes how video and e-commerce will mingle on the platform. Prime Video ads are forecasted to reach 115 million viewers a month in the U.S., according to the pitch. Meanwhile, Prime Video has a total audience of 157.3 million viewers in the U.S., according to Insider Intelligence. In public filings, Amazon has said that Prime membership has topped 200 million worldwide. That suggests Amazon expects most viewers will run with the ad tier.

It’s unclear from the pitch deck if Amazon is counting “co-viewing” in its forecast of monthly ad viewers. “Co-viewing” is when multiple people in a household watch at the same time. Also, 84% of “Prime Video households shopped on Amazon in the last month,” Amazon’s pitch said. Amazon’s online shopping base is highly coveted by brands looking to make sales.

Amazon declined to comment for this story.

Brand interest is potentially high if Amazon is able to add unique formats, such as interactive and shoppable ads for Prime Video, when many clients already buy Amazon inventory, according to another ad agency executive. Amazon is already connecting shopping and video through “Thursday Night Football,” and this year it teamed up with the NFL on the first-ever Black Friday football game.

Amazon has said that it wants to maintain a lighter footprint for ads on its original shows, compared to linear TV. But no matter the ad load, Prime ads have the potential to vastly increase inventory. For perspective: Freevee, Amazon’s ad-supported channel, has 35.6 million monthly U.S. viewers, according to Insider Intelligence. Meanwhile, “Thursday Night Football” averaged 11.3 million weekly viewers over the 15 weeks it streamed last year, according to Amazon’s public filings. In its pitch deck, Amazon touted shows such as “Rings of Power,” based on JRR Tolkien’s “Lord of the Rings,” which saw 25 million views worldwide for its premiere last year.

‘Fully baked’

“The reality of Amazon is they could only take so much share of wallet because they really didn’t have the inventory,” said the media buyer. “This really becomes a scale conversation and, quite frankly, a quality conversation, because the quality of content available on Freevee was never comparable to Prime Video.”

In its pitch deck, Amazon makes a clear distinction between Freevee and Prime Video ads, saying advertisers would have to negotiate those two offerings separately. Buyers also have to order into “Thursday Night Football” on its own.

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“A lot of clients already buy Freevee,” a second buyer said. Ad Age previously reported Freevee’s CPM in the mid-$20s. The buyer said they’re viewing Amazon’s new content structure, and likely pricing structure, similar to linear TV, where Freevee is a Bravo-esque cable channel, Prime Video will be primetime and “‘Thursday Night Football’ is just baked in there because sports needs to be baked into everything and is keeping the lights on.”

The addition of Prime Video’s streaming inventory for the market also presents potential changes in the structure of buying ad space with big, cross-media tech companies. The second buyer said over the next year, they anticipate the agency will start trying to do “one-stop-shop” deals with Amazon and Google to buy all video, search and retail inventory at once. While that won’t necessarily change what or how much inventory clients purchase, the shift would allow the agency to “start talking about how [the agency and Amazon] can grow bigger together because we are giving them all of our dollars at once.”

How Amazon measures audiences is sure to be an ongoing debate, however. Amazon has worked with Nielsen to validate its viewership with “Thursday Night Football,” but Amazon also uses its own first-party data to show advertisers it could reach larger audiences than Nielsen registers alone.

Amazon has already relayed to advertisers some details of its measurement plans for Prime Video ads. Nielsen, iSpot and VideoAmp will be available at launch, and there will be brand safety tools available from Integral Ad Science, DoubleVerify and Moat, which can report on the caliber of content that surrounds ads on digital channels.

One of the media buyers said that Amazon’s offering stands out from some competitors because “it’s fully baked” before launch.