Marketplace Briefing: Amazon bets on deals with Roku and Disney to keep its DSP business in high demand

Both of these deals point to what seems to be a big priority for Amazon’s ad business right now: growing the amount of high-quality and scalable inventory available to advertisers through its DSP. Amazon’s ad business got its start with more bottom-of-the-funnel units like Sponsored Product Listings, designed to target customers right at the moment of purchase. But with its DSP business, Amazon wants to flex its full-funnel capabilities more; in order to do so, it is striking more deals with publishers and streaming services to use its access to high-quality inventory as a selling point, while also using Amazon’s targeting capabilities. 

“When you look at [Amazon]’s major product announcements over the last two years, most of them have been more on the DSP side,” Joe O’Connor, senior director of growth and innovation at Tinuiti, said. There was the announcement in 2024 that it would bring ads to Prime Video. At its annual Unboxed advertising conference last year, Amazon unveiled a new user experience for its DSP, consolidating some displays to make it easier to set up a campaign, and also simplifying some of the dashboard that advertisers use to monitor the success of the campaign. 

Over the years, the DSP has become a bigger piece of the advertising puzzle for sellers. Will Haire, CEO and co-founder of marketplace management company BellaVix, said that for his Amazon clients, he likes to approach the “80/20 rule” for advertising — that is, 80% of advertising spend goes to sponsored products and other pay-per-click ad units, “because they have the best return.” The other 20% of the budget, then, goes to DSP — and of that, 30% he likes to invest in streaming TV, to reach new audiences. 

Streaming TV, he said, just “legitimizes brands.” It helps reassure people that it’s an actual company that lives beyond the confines of an Amazon product page. “Even if it’s a small budget, we do try to make sure we’re doing something with video that’s outside of Amazon to help our brands with that brand awareness problem.”

“I’ve seen streaming TV investment through Amazon’s DSP increase triple digits for the last two years,” O’Connor said, adding that, from his perspective, it’s been the piece of Amazon’s advertising ecosystem “that’s been in highest demand.”

In its announcement of both the Roku and the Disney deals, Amazon’s press releases touted various stats designed to address concerns around media waste. Early testing of the Amazon-Roku integration, for example, found that advertisers “reached 40% more unique viewers with the same budget.” But Haire said for the smaller brands he represents, that’s less of an issue. “We’ve run quite a bit of streaming TV through Amazon’s DSP. We’ve never had any issues with scale or delivering budget,” O’Connor said. 

Haire said that, from where he sits, the Disney partnership especially “raises the quality of available inventory substantially. With access to Disney+, Hulu and ESPN inventory through DRAX, advertisers like us get better segmentation and targeting capabilities, which has historically been a gap Amazon had compared to players like MNTN.” 

However, it will take a while for this inventory to become available; Amazon said the Roku solution will be available to all DSP advertisers by Q4, while the Disney integration will be available by Q3. Both will be rolling at an important time, when advertisers will be looking to up their spend ahead of the holidays. 

As with any of these integrations, there are still some details that agencies are waiting for answers on. O’Connor said, for example, that he wanted to know what percentage of Roku’s inventory will be available through the integration; he drew parallels to a partnership Amazon announced with Pinterest two years ago, allowing Amazon sellers to advertise their products directly on Pinterest. In his experience, the volume of inventory available through that partnership is so small that “it isn’t material to actually deliver any influence, any type of performance, or anything like that.” 

But so far, the promise of the Roku and Disney integration is pretty straightforward: Brands that sell on Amazon want to reach more streaming TV users, and these deals will give them access to more viewers across more well-known platforms and streaming devices. As these roll out, expect agencies to spend more time testing different ad units across different streaming services, trying to see which one will provide the biggest boosts for different clients. 

“As an agency, it’s really exciting to see these partnerships as they allow us to expand Amazon’s best-in-class targeting capabilities across more premium STV inventory,” O’Connor said. “It also allows us to better measure the downstream outcomes that inventory from Disney and Roku generate, in terms of influencing potential shoppers’ likelihood to purchase on Amazon.”

What I’m reading

• Amazon CEO Andy Jassy told employees that he expects Amazon will reduce its corporate workforce “in the next few years” as it gets more efficiency gains from its AI agents.
• Amazon has reorganized its health-care business after losing a handful of top executives in recent months. 
• It’s official: Prime Day is July 8-11 this year. 

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