Amazon is allowing ad-tech companies to sell ads in streaming TV apps, and marketers see it as a sign that the e-commerce giant is becoming less of a walled garden

Amazon Fire TV Cube

Amazon has struck a deal that allows ad-tech firms The Trade Desk and Dataxu to sell ads in publishers' Fire TV apps through private marketplaces.
Amazon is competing head-on with Roku for TV ad dollars, and marketers say the move could make Amazon less of a so-called "walled garden."
Publishers that use Amazon Publisher Services can use private marketplaces to better control the advertisers that they work with and set ad prices, which will help issues like frequency capping.
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Amazon is turning to ad-tech companies to crank up the number of commercials in Fire TV apps.

On Friday, the company announced a deal with The Trade Desk and Dataxu that allows the ad-tech firms to sell ads in publishers' Fire TV apps. Instead of buying ads directly from an Amazon representative, advertisers can buy ads through private marketplaces set up by The Trade Desk and Dataxu. Dataxu and The Trade Desk's technology helps marketers buy programmatic video and digital advertising.

Publishers tend to prefer creating private marketplaces with advertisers because they can set prices and form direct relationships with advertisers that want to buy ads programmatically through software. Such models are common with publishers and tech companies like Google as a way to serve more sophisticated advertisers.

Specifically, Amazon's new program is part of Amazon Publisher Services, an arm that helps publishers manage their ad inventory. The Trade Desk and Dataxu declined to name advertisers that have tested the program but The Trade Desk places ads in ESPN's, Discovery's, and NBC's OTT apps.

Dataxu CEO Mike Baker described Amazon Publisher Services as an ad-tech company within Amazon and said that it will be interesting to see if Amazon Publisher Services begins to get grouped into larger video teams within Amazon, like Fire TV or Amazon Advertising.

According to a blog post from Amazon, the program will help solve frequency capping issues — a common challenge in OTT advertising when viewers are shown the same commercial multiple times. Amazon said that the program will also give advertisers transparency into fees so that they can see how much they paid and how much of that money goes to publishers and ad-tech companies.

Amazon has steadily been building up its OTT business over the past year. The company recently renamed its ad-supported service from FreeDive to IMDB TV to position its content as an alternative for TV and sells advertisers on its scale and data.

"It is definitely interesting," said Joshua Lowcock, global brand safety officer and US chief digital and innovation officer at UM Worldwide. "Success depends on whether Amazon will give access to their retail data as part of any buy and whether Amazon will put money behind IMDB TV — both original content and marketing support."

Amazon is battling Roku for OTT advertising money

Roku

Amazon and Roku are in a race to own TV streaming. Amazon reports that Fire TV reaches more than 34 million households while Roku says that it reaches 29.1 million households.

Both streaming devices include apps like NBC, Sling, YouTube and Pluto TV. The Trade Desk and Dataxu buy ad space from Roku as well as Amazon.

According to a spokesperson for The Trade Desk, the Amazon deal "provides us with more comprehensive data and a better view of results than a walled garden like Roku."

Roku did not respond to a request for comment.

Amazon and Roku are known to be so-called "walled gardens" that limit the amount of data that advertisers can access. Marketers suggested that Amazon's move could make it less of a walled garden and more appealing to advertisers.

"It presents them as being more open than Facebook or Google," said Alan Wolk, cofounder and lead analyst for TVREV. "It's likely that they will gain customers using vendors like Dataxu and The Trade Desk, customers who might not be all that aware of how to buy directly from Amazon."

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