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Amazon’s Fire TV Stick has been the most popular way for users to turn their regular TVs into smart ones. However, after years of providing a cheap and straightforward upgrade option, Amazon is now turning to prominent ads to recoup its investments.
While Amazon’s Fire TV sticks have always included ads, they were primarily exclusive to the home page. However, according to Charlotte Maines, the head of Amazon Fire TV’s advertising department, the company will introduce new ad formats that not only offer companies more advertising space but may also impact the overall user experience.
How would these ads work?
Reports suggest that Amazon plans to implement ads in three different formats. The first format would use Alexa, equipped with generative AI, to help users discover content. While this may seem like a useful feature, the company plans to integrate ads within these search results. For instance, when a user asks Alexa to find a movie featuring Robert Downey Jr., the search results will display ads for shows or movies starring the actor.
Similarly, the second type of ad format will appear when a user is browsing the TV catalogue. Lastly, the third format, known as the “Cadillac of ad spots,” will open up the Featured banner at the top of the Home Screen to all advertisers rather than being exclusive to streaming services.
Why is Amazon doubling down on ads?
Given the slowdown in the streaming business, Amazon’s shift towards ads is evident since the company now generates more revenue from these advertisements than from its subscription fees. Additionally, to make matters worse, these ads will not be limited to Amazon’s Fire TV devices but will extend to third-party vendors, such as TCL, who use the Fire TV platform on their TVs.
However, this shift could also potentially impact its customer base. Recognizing this issue, Maines stated, “If you do not enjoy using your Fire TV, you will stop using it. Then I don’t have an opportunity for advertisers because I don’t have a user.”