Amazon Video Direct is not a YouTube rival – but it has big brands in its sights

Executive editors Natan Edelsburg (@twatan) and Adam Flomenbaum (@flobombin), and guest contributors, bring the inside track on the latest developments in the TV space.

Given that digital video advertising is expected to be worth over $9.8bn this year, according to eMarketer, and continues to grow where other sectors are faltering, it’s little wonder that so many big players are trying to tap into this lucrative market. But what makes Amazon’s launch of Amazon Video Direct more interesting than some of its putative rivals is the deeper relationship it has with its customers and the potential opportunity it has to convert product placement into sales – the advertising revenue might not be the main attraction.

Equally, at face value, an attempt to create a rival to YouTube looks like a curious and rather belated move – after all, YouTube was built from the grassroots up while Amazon’s video proposition has always been top down, and based on commissioning quality content rather than user-generated content. But any direct comparison is a chimera.

While anyone with an Amazon account can create and upload their content, the process is long-winded and relatively complicated, and involves providing credit card and social security numbers, as well as the requirement that all content is captioned and full credits provided. Compared to YouTube’s far simpler 'upload and go' service, it is therefore cumbersome – perhaps deliberately so – suggesting that amateur content creators are not its real target market.

Instead Amazon’s focus seems to be on professional and semi-professional video creators that would be able to attract millions of viewers rather than those who would just attract a handful. And, more crucially, it is directly targeted at big brands.

With companies like Condé Nast, the Guardian, Mashable and toy manufacturer Mattel among the first to sign up to the service, it’s likely that other brands and media owners will be monitoring its success. Mattel has already said that it was attracted to the service because it can get its pre-school brands, including Thomas & Friends, Pingu and Fireman Sam, in front of Amazon Prime members in new territories and directly monitor their performance through its online dashboard. This data and measurement can be driven into the shopper side of Amazon’s business and therefore work as an additional value it can offer to any marketer that it wants to work with for content.

As an exercise in data capture and distribution, Amazon Video Direct is an enhancement of what the company already measures – it already knows the reading, eating, travelling and drinking habits of its users. If it can seamlessly stitch Amazon Prime with its shopper marketplace then it will offer something considerably more potent. Rather than be seen as a YouTube rival featuring a mixture of amateur and professional content, Amazon Video Direct is targeting those advertisers who are diverting traditional advertising budgets into long-form video content – and wants to connect product placement deals to sales.

Mark Boyd is founding partner at Gravity Road

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.