Indilens Web News Live Daily News on India ! Insights of India
[ad_1]
- After saying it wouldn’t run ads on its smart speaker Alexa devices, Amazon is ramping up its pitch for audio ads on Amazon Music, according to three agencies who recently heard the pitch.
- Amazon started to test the ads last year.
- Audio ads are part of Amazon’s effort to show that its platform works for advertisers interested in growing brand awareness.
- According to one agency that’s testing Amazon Music’s audio ads, the ads require a minimum of $50,000 in ad spend. Another ad-agency exec said CPMs for audio ads cost 30 to 40% less than Amazon’s streaming-TV ads.
- Click here for more BI Prime stories.
After saying it wouldn’t run ads on the smart speakers, Amazon is doing an about-face and ramping up its pitch for ads on Alexa, at least on Amazon Music.
Last year, Amazon quietly started testing audio ads in the free version of Amazon Music, its music-streaming service built into Alexa-powered Echo devices. Amazon Music also has mobile, desktop, and Amazon Fire apps. The service has two tiers: An ad-supported, free version, and a subscription-based ad-free version.
The ads are limited to Amazon Music and do not play elsewhere in Alexa, including in the miniapps — or skills — that publishers and marketers create.
Amazon is now making Amazon Music a bigger selling point, three agencies who have received Amazon’s pitch in recent months told Business Insider. The agencies spoke on the condition of anonymity because of their relationships with Amazon.
One agency said Amazon started pitching them audio ads in September. Another said Amazon plugged the format in the past couple of weeks as part of its advertising business that includes search, video, and programmatic advertising.
“I literally gasped,” an executive at the agency said. “I was truly shocked because Amazon has made such a big deal about not using [Alexa] as an ad platform for so long.”
The executive, whose identity is known to us, spoke on the condition of anonymity because of their agency’s close ties with Amazon.
Amazon did not respond to a request for comment from Business Insider.
Amazon is playing up audio ads as a branding tool for marketers
Amazon explains its advertising business to marketers as a funnel. At the top are formats directed at helping marketers build brand awareness and product loyalty. Search ads geared toward getting consumers to buy products on Amazon are at the bottom of the funnel. One agency said a pitch deck laid out the audio ads at the top of the funnel alongside over-the-top-media (OTT) and Kindle ads.
The focus on branding is important because Amazon has been trying to demonstrate that it works for advertisers that don’t sell items on Amazon but want to increase awareness of their brand.
“It is a true strength that they can act on every stage of the funnel — that’s what they always bring it back to,” the agency exec who recently received the pitch deck said.
According to two media buyers, audio ads are pitched in decks that are part of marketing for Amazon’s demand-side platform (DSP), the media-buying software that advertisers use to buy ads on publishers’ websites. Advertisers use the DSP in two ways: Big brands work with an Amazon rep to buy campaigns through managed services, and smaller brands do it through a self-service approach. According to one agency, audio ads are available through managed services and to small number of advertisers.
Audio ads require a $50,000 minimum, according to the agency source who’s testing them. According to another agency, the presentation said the cost per thousand impressions (CPM) for Amazon Music is 30 to 40% lower than Amazon’s OTT ads, which shows how much cheaper audio ads are than video ads. CPM costs for Amazon Fire ads are around $25 to $30, according to buyers.
Amazon is playing up its scale, but ads are low on targeting
Advertisers can run audio ads that are 30 seconds or less, according to the agency that was pitched in September. For ads served to people listening to music on a website or app, the format includes an image. Amazon is using a campaign for Kellogg’s Pop-Tarts in its pitch deck, according to the agency source.
Amazon cited research from eMarketer that said 74 million people in the US use a smart speaker to promote its broad reach. However, the Amazon Music ads’ measurement is limited, and advertisers cannot target them, two of the agency sources said.
“Clients are saying this is interesting, but it’s not an out-of-the-gate game changer,” one source said.
One agency exec said marketers would need to tread lightly with audio ads because Amazon execs stressed in the past that Alexa would remain ad-free to avoid turning off people who may feel bombarded by ads.
Alexa has been a bigger focus of Amazon’s ad push
In addition to Amazon Music, Amazon has been pitching advertisers on ways to promote Alexa in their commercials that run on Amazon Fire TV apps and its ad-supported IMDb TV streaming service.
In a recent pitch deck, Amazon promoted a format called “branded utterances” that puts Alexa branding in ads. An example with PepsiCo-owned Smartfood features a call to action prompting consumers to ask Alexa to order the popcorn. There is no minimum spend for marketers to make a “branded utterance,” though Amazon is promising to cover the cost of creative work for advertisers that spend at least $750,000 on advertising, according to the deck.
To read more about Amazon’s advertising business, check out these stories from Business Insider Prime:
Inside Amazon: Everything we know about the e-commerce giant’s growing advertising business
Amazon is known for its ruthless interviewing process. We talked to insiders about how to get a job there.
7 charts show why Amazon’s ad business could balloon to $17 billion this year and is a growing threat to Google
SEE ALSO: Facebook and Google’s historically massive advertising is slowing, and it shows how privacy and Amazon are taking their toll
Join the conversation about this story »
NOW WATCH: 5 things about the NFL that football fans may not know
[ad_2]
