It’s Prime Time for Ads: Amazon Prime Video Unveils Ad-Tier

It’s Prime Time for Ads: Amazon Prime Video Unveils Ad-Tier

By Elise Conlin
Data Science
News & Press
Retail Media
Retail Strategy
January 23, 2024 · 2  min

Amazon announced that beginning next Monday, January 29, 2024, advertisements will officially launch on Prime Video. The ad tier will automatically default for all accounts, and users who prefer an ad-free experience will be prompted to pay an additional $2.99/month (on top of the $14.99/month regular Amazon Prime subscription). Despite Prime Video being on the record for having significantly fewer ads than linear TV, this will still be a significant change for viewers. What can we expect from this change, and how can advertisers take meaningful action on this announcement?


The Quick Facts

  • Prime Video reaches over 115 million monthly users. 
  • Almost 71% of the US population currently uses a streaming service, and that number continues to grow. 
  • When the ad-supported tier launches, Prime Video will be one of the largest premium ad-supported services in close to every country they operate in.
  • Prime Video’s CPMs will be in the low- to mid-$30 range, a price significantly below competitor streaming platforms like Netflix and Disney+. 
  • 288.9 million households across the globe with Amazon Prime accounts will automatically be included in the ad-supported tier.


What Can Advertisers Expect?

  • Advertisers have experienced incredible success in their ventures on Thursday Night Football (TNF) on Prime Video since Amazon Ads announced their partnership in 2022.
    • TNF viewers are 35% more likely to take action by searching for brands advertised on TNF than brands or products advertised on Sunday or Monday night football. 
    • Momentum Commerce’s client, Therabody, saw a 50% sales increase for their newest product after running their TNF campaign.
      • The expanded audience pool paired with paid ad placements allowed for the benefits to seep into holiday shopping success over Cyber Week.


What’s An Advertiser’s Next Move?

  • Lower costs paired with market-leading audience reach naturally expands the competitive landscape of brands seeking to advertise on Prime Video.
    • On a similar note, small-to-medium-sized brands now have more accessibility than ever to reach large audiences. What was once out of reach (and budget!) is a real possibility with Prime Video ads. 
  • If TNF is any indication, Prime Video ads will be extremely influential in product discovery on Amazon. Ensuring that all product listings are optimized with essential keywords, and storefronts are up to date are all part of what will make a brand successful. 
  • With fewer ads than linear TV promised for the time being, advertisers need to focus on making compelling content! Understanding your audience and their viewing behavior will be key in successfully deploying ads on Prime Video.
    • Have effective measurement in place (like Amazon Marketing Cloud
    • Ensure that production values are high enough to work in the context of video content often watched on larger screens
    • Create thoughtful content that accounts for specific demographics, geographic location, and behavioral patterns to take full advantage of targeting capabilities as they develop
  • Even if users opt for the ad-free tier, live events like sports will still include ads. Make sure to include these opportunities in your strategy!


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