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Amazon Ramps Up Originals Ad Spend Ahead Of New Competitors’ Arrivals

Esme Creed-Miles in Amazon’s thriller series “Hanna”

The Flixcopalypse, as sainted colleague Alan Wolk likes to term it, isn’t quite upon us, but the war for viewers’ attention is already well underway, with Amazon stepping up its ad spend in the first half of the year nearly 30 percent, according to a new study. The moves appear designed to lock in customers before they start hearing more about new services from Disney, Apple, AT&T, Quibi and others over the next several months.

Those marketing campaigns by others are already beginning. In just a few days, Disney+ will showcase its programming slate at D23, its annual celebration of itself. It also just announced Michael Cimino (no, not that Michael Cimino) as the star of its serialized sequel of the gay romantic comedy film Love, Simon of the same name. Apple+ just released a trailer of its big-dollar behind-the-scenes dramedy The Morning Show. This stuff is starting to get real.

And Amazon isn’t waiting around for the new kids to start filling up the block. Its Prime Video unit outspent Netflix on advertising over the first half of 2019, according to an analysis by Mediaradar. The report did not disclose actual spending amounts.

Amazon had 13 campaigns in the first half of the year, led by spending on Hanna, the suspense’/coming-of-age series based on a recent film. That campaign even featured a full 60-second Super Bowl commercial.

That compared to 67 campaigns by Netflix during the period, though obviously for far less money in each (a Super Bowl ad will do that to your numbers).

Even without the hard numbers, there are telling trends here, Mediaradar CEO Todd Krizelman said.

Amazon shouldered past Netflix for the spending lead, and is pushing to get customers into its ecosystem before newcomers begin their ad campaigns. In doing so, the company is placing bets on its new original content, shows created under new-ish studio head Jennifer Salke with a decidedly different approach from her predecessor.

“Our recent OTT analysis showed that Amazon Prime Video has shifted to become the biggest OTT spender in the first half of 2019,” Krizelman said. “It also highlighted that Amazon Prime Video’s jump to No. 1 can in part be attributed to the heavy promotion of its new original content, including increased investment in native advertising. In fact, its native advertising spend rose 5X, year-over-year, when comparing 2018 and 2019.

Also of note, only Amazon increased its ad spend during the period on a year-over-year basis. It’s important to note that ad spending can ebb and flow substantially, depending on what programming is arriving when in an OTT service’s lineup.

But Amazon jumped 28 percent year-over-year, while Netflix and Hulu (which, in its defense, was going through an overwhelming set of corporate changes as it was acquired by Disney) cut back by more than 40 percent each.

As well, Amazon dramatically goosed up its spending on digital advertising, up more than 300 percent, according to Mediaradar. The company made a string of high-CPM buys of original series such as The Boys, Good Omens and, of course, Hanna.

“While spend amongst these top OTT providers can be volatile based around content releases, it is telling to see Amazon continue to invest in the platform and its original content, further enticing viewers to stay in, or even enter, the ‘Amazon Ecosystem’” said Krizelman.

The biggest Netflix campaign was for the lush wildlife documentary Our Planet, which also got the Super Bowl treatment, though with only a 30-second ad.

“Although Netflix’s spend on traditional advertising is down year-over-year, Netflix’s latest shareholder letter showed that its spend for overall marketing remains fairly steady as it experiments with new promotional initiatives, such as a Stranger Things game (mobile & console), and brand partnerships with companies such as Coke, Nike, Burger King, Baskin Robbins and Fortnite,” said Krizelman.

Amazon hasn’t stinted on other marketing initiatives either. It was omnipresent at San Diego Comic-Con, taking over a substantial block of open land across the street from the convention center to create immersive experiences for shows such as The Expanse, and decorating the second floor of a series of buildings along the Gaslamp District’s main drag with a single long mural for The Boys.

This week, as part of the launch of the next season of Emmy-winning period comedy The Marvelous Mrs. Maisel, Amazon subsidized the cost of various beauty, food and other services in Los Angeles stores at 1950s-level prices. A hamburger at Mel’s Drive-In, for instance, cost 50 cents, pastrami was 99 cents at Canter’s Deli, and gas cost 30 cents per gallon, with lines at a Santa Monica Chevron overwhelming the station and forcing police to temporarily intervene.