Report: Amazon mulls building its own ad product for OTT TV

Dive Brief:

Amazon is reportedly in talks to build its own video ad serving product for over-the-top (OTT) TV that it would license, according to sources familiar with the situation, according to reports from Business Insider and others. The product would resemble Comcast's Freewheel and Google's DoubleClick.
In other OTT TV advertising news, video platform Innovid is introducing OTT Composer, a self-service ad tool allowing marketers and publishers to design connected TV ads and scale them across video platforms, according to a news release provided to Marketing Dive. The tool would let marketers build an interactive video once and create multiple versions that can run across OTT devices and channels, including Roku, Apple TV, Samsung, Amazon Fire, PlayStation, Hulu, Fox's true[X] and others.
This week, Innovid said its OTT served video ad impression tracking became the first such tool from an OTT platform to receive Media Rating Council (MRC) accreditation, which requires adherence to industry standards for video ad measurement.

Dive Insight:

The latest news from Amazon and Innovid suggest that the OTT space may be heating up, and marketers may have new opportunities to reach the growing audiences on streaming services, like Netflix, Hulu and others, where advertising has been limited. Marketers are beginning to invest more in OTT, as more consumers embrace smart TVs and set-top boxes. Ad spending on OTT TV is projected to increase 40% to $2 billion in 2018, and 80% of U.S. households will be reachable by OTT this year, according to updated Magna forecasts.

While details are scarce on Amazon's possible development of an OTT ad product, the company's entry into the space could put it in competition with Google and Comcast, and fuel its growth as a video ad platform. While Amazon's own Prime Video is an OTT player itself and the company recently introduced a DVR-like device for over-the-air TV, the company has also been ramping up marketing services, including ad creation, deployment and tracking. Amazon now ranks third in digital ad revenue, behind Google and Facebook. Building and licensing a platform specific to the needs of connected TV would give Amazon a clear advantage over its competitors, since products like Google DoubleClick were created when desktop display ads dominated, according to Business Insider. Google is also angling for a bigger piece of the OTT TV space with its premium YouTube TV service. Amazon also has troves of consumer data that advertisers could potentially use to target and measure campaigns.

Innovid's OTT Composer and MRC accreditation could help marketers better scale campaigns and measure their effectiveness, which are two areas that have been barriers in the connected TV marketplace. The ability to quickly create interactive ad campaigns that are supported across different streaming services and platforms could be more cost-effective and efficient, which could attract more marketers to the format.

Others are working on enhancing their nontraditional TV offerings as more consumers cut the cord. AT&T announced the relaunch of its ad and analytics business under the new name Xandr, which will include a partnership with Altice USA and Frontier Communications to aggregate and sell their national addressable TV ad inventory. AT&T describes the offering as a "one-stop shop" for marketers to help them reach targeted audiences cost effectively and is a step toward creating a national TV marketplace for marketers and content publishers.