January 25, 2023
Amazon Recruits Disney Exec Helfand To Lead Ad-Supported Launch
- by Karlene Lukovitz @KLmarketdaily, January 5, 2024
Amazon has raided Disney for an executive to lead the implementation of its about-to-launch ad-supported streaming strategy — timing the news to break as major streamers prepare to compete for attention and ad dollars at next week’s CES in Las Vegas.
Jeremy Helfand has joined Amazon as a vice president and head of advertising for Prime Video, he revealed on Thursday, in a LinkedIn post. Amazon subsequently confirmed the news.
Helfand joined Hulu in 2018 as vice president and head of advertising platforms, and transitioned to executive vice president, advertising and data platforms for Disney Entertainment and ESPN technology. Prior to Hulu, he held positions at Adobe and Advertising.com.
“I joined Hulu in 2018 to jump into the then emerging streaming TV revolution, and what an incredible ride it has been, ultimately landing at Disney,” Helfand wrote in announcing the news. “Through all the business growth and innovation, the team is what you remember most, and I’m so proud of what was accomplished. It’s time for the next chapter, and I’m thrilled to share that I’ve joined Amazon to lead Prime Video Advertising. I’ll be working with a talented team of customer-obsessed business builders to create something special, starting with our upcoming launch!”
Amazon is set to launch its ad-supported model Jan. 29. Existing standalone Prime Video subscribers and those getting the service as part of their Amazon Prime memberships will automatically begin seeing ads in the video content unless they opt to pay $3 more per month to continue their currently ad-free experience.
The Amazon-owned FAST Freevee and Prime Video-livestreamed sports already carry advertising, and Amazon reported $12.1 billion in other ad revenue from web display and search advertising in last year’s third quarter (8.5% of its total revenue for the period).
Bank of America analyst Justin Post this week estimated that Amazon could generate an incremental $3 billion in revenue in 2024 from launching ads on Prime Video, and another $1.8 billion in additional fees paid by consumers to avoid the ads.
Helfand, who helped launch new ad formats, including
“pause ads,” while at Hulu and Disney, is also expected to push the envelope on innovative formats at Amazon. The massive online retailer provided a glimpse of its direction during its groundbreaking “Black
Friday Football” game last year, which featured numerous interactive, shoppable ads.
Amazon said it sold out the ad inventory in the Black Friday game, and has recently been touting
big 2023 viewership gains for its “Thursday Night Football” franchise.
Disney is set to hold its annual Tech and Data Showcase for advertisers during CES.
Disney, which recently became full owner of Hulu, offers an ad-supported bundle that includes Hulu, Disney+ and ESPN+, and Hulu/Disney+ bundles with and without ads, as well as standalone subscriptions to the brands. The company also recently began a beta launch of a Hulu content hub on Disney+ app, called Hulu on Disney+.
Helfand is the latest example of major streamers’ appetite for seasoned streaming ad sales talent.
NBCUniversal recently hired Roku veteran Alison Levin as president of advertising and partnerships. In 2022, Netflix wooed Peter Naylor and Jeremi Gorman away from Snap to oversee sales for the launch of Netflix’s ad-supported tier. Naylor had previously worked for NBCU and Hulu; Gorman for Amazon.
There's no doubt that an Amazon advertiser can benefit greatly from its vast database of shopping activity by its users. This is probably most true of direct marketers or search advertisers but can have implications for branding campaigns if the brands are allowed to withdraw some of their dollars from the annual TV upfront buys and be more selective in their use of media.
As for the estimate that Amazon might garner $3 billion in ad dollars in 2024, I'm not so sure about that. According to Nielsen Amazon captures about 3-3.5 % of all TV viewing via a TV set. If two- thirds of that viewing becomes ad-supported and attaining that level will take some time--- that reduces to roughly 2-2.2% of all viewing. If Amazon limits the number of ad messages to a figure that is well below the "TV" norm, there would be another major reduction---to, say, 1-1.5% of all viewing. With a combined "TV" ad spend of about $90-95 billion for linear TV and streaming a more likely Amazon ad revenue estimate might be $1.0-1.5 billion for its first year or, if it commands a hefty CPM premium--- as is possible during the introductory phase---perhaps $2 billion.
In any event, this represents another player entering the picture in an already overcrowded marketplace of commercial time sellers trying to divvy up the average viewer's daily ad-supported viewing time which works out to about 4-4.2 hours a day---or so the stats tell us. Is that enough viewing to go around? Only time will tell.