Amazon’s impact on the streaming ad market has opened CTV door to small business advertisers

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The Programmatic Marketer

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Consider the example of Naturepedic, a premium mattress and sleepwear brand based in Cleveland, Ohio.

Chief Growth Officer Erin Schultz told Digiday he had “little faith” in CTV prior to a campaign the brand ran in the latter half of 2024, targeting consumers in Los Angeles, New York and Chicago. (He didn’t give exact performance metrics of this campaign). But the ads, booked through ad buying platform MNTN, performed “very well” in driving customers into its stores on a media budget of just under $500,000.

A shorter follow-up campaign starring former NFL quarterback Bernie Kosar, for which the brand has earmarked up to $10,000, is set to run on a similar spread of CTV ads on channels like HGTV and the Food Network. 

Schultz told Digiday he expected Naturepedic to include Amazon Prime Video in that spread, in a further campaign penciled for later this year.

Naturepedic’s embrace of CTV mirrors a path taken by small and medium business brands toward streaming ads. “Streaming prices in general, not just at Amazon, have lowered enough that smaller advertisers are more comfortable with it,” said Ross Benes, a senior analyst at eMarketer.

SMBs on TV

Drawn by lower costs and the chance to pursue target audiences more precisely than on linear, SMB clients are shifting spend from linear TV into CTV. In some cases they’re trying out TV advertising for the first time via streaming.

Leah Lam, associate director of brand media at agency Collective Measures, estimated that five of her agency’s clients had recently shifted budget from linear into CTV, while 10 clients have used lower CTV costs as a means of running TV ads for the first time.

“It’s been a good intro [for] them,” she added. Lam declined to name clients or provide financials. 

Skyler McGill, head of programmatic and video at Wpromote, estimated that SMBs are spending between 15 to 20% of their overall budgets in CTV.

“[Amazon Prime Video] is only becoming more accessible for small and mid market brands to be able to enter the market and now compete against larger competitors that have historically had very large TV budgets,” McGill said. “It gives them a fighting chance to punch up a bit above their weight class.” 

The SMB advertisers taking advantage of that shift include retail brands like Naturepedic and auto dealerships, as well as legal and healthcare. Madhive, a middleman connecting broadcasters and local advertisers to the CTV marketplace, just struck an audience and data partnership with Polk Automotive Solutions from S&P Global Mobility to create a local CTV marketplace for the U.S. auto industry.

The move essentially guarantees more local auto dealerships will increase their spend across the CTV space. Christiana Cacciapuoti, vp of enterprise strategy and solutions at Madhive, said U.S. automotive ad spend was projected to reach $12.3 billion in 2024, citing Broadcast Investment Analysis (BIA) data.

“What Amazon is doing… is taking friction out of that buying,” said Cacciapuoti. “If you are a local business… you want to make sure that your dollars are impacting outcomes, usually sales. [That’s] helping local businesses all over the country… have this omnichannel approach to advertising that used to be reserved for Coca-Cola and Pepsi.”

Amazon’s advantage

Blue-chip brand advertisers may throw the best parties at Cannes Lions, but it’s small businesses that form the bedrock of the ad industry’s most powerful players. The vast majority of Google and Facebook’s revenues come from companies that trade far below the glow of the S&P 500. 

Amazon is happy to have them. Its overall ad revenue reached $17.3 billion in 2024, a 17% year-on-year rise. The tech company’s ad business has become a standard tool in the brand advertiser arsenal, owing in part to the Amazon Demand-Side Platform (DSP), the means via which most advertisers buy Prime Video ads.

At media agency Tinuiti, for example, client investment on Prime Video ads rose eightfold between the first quarter of 2024 and the same period this year.

Several other platforms and media companies have been attempting to make louder overtures to SMB brands. This time last year Roku overhauled its self-service ad platform to better cater to small businesses. NBCU made ads against its Olympic coverage available to buy programmatically, making it available to a far greater number of brands. Comcast launched Universal Ads, a product designed to give SMB and DTC advertisers better access to its subsidiaries’ ad inventory, in January. Meanwhile Snapchat has pivoted to focus on smaller advertisers in a bid to diversify its customer base.

But it’s Amazon that’s pulled down CPMs in the market, and Amazon that already has the biggest “in” with small-business advertisers that might already be investing in sponsored listings or search ads using its DSP, shifting stock via its core e-commerce platform, or else drawn in by its performance-oriented TV inventory, including shoppable ads. 

Crucially, the same audience targeting data used in its search and sponsored listings is available in Prime, a bridge that McGill said is helping to “unlock budgets.”

Vaughn Ericson, svp of activation strategy at agency True Media, told Digiday he expected the shop to emphasize the lower-cost CTV opportunity to its small business clients.

“That video experience is very powerful,” he said. “Sight, sound and motion — that’s critical and it’s something clients want to see.”