Prime Early Access Results, Retail Media Networks, and Netflix Ads – The Catalyst with Brad Costella

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Hi, this is Adlucent’s latest edition of the Catalyst. I’m Brad Costella, Sr. Director of Strategy. Today, I’ll cover the top trends coming out of October to prepare you for the holiday season and 2023 planning. 

We’ll be looking at Amazon’s Prime Early Access Sale results and sifting through the tea leaves to determine what it means for holiday retail sales this year. We’ll also touch on the continued rise of retail media networks and, lastly, the long-awaited launch of Netflix’s ad-supported tier.

1. Amazon’s Prime Early Access Results

Prime’s Early Access Sale has come and gone, and early reports are that it didn’t have quite the pull that the retail giant would have hoped. While Amazon doesn’t share specifics, several 3P commerce platforms have reported elevated sales but weren’t close to Prime Day 2022 levels. And most importantly, most prime member shoppers weren’t buying holiday gifts but products for themselves that they found at substantial discounts.

What do these results mean now that the holiday season is upon us? While it’s true that the season continues to pull forward, shoppers this year seem more worried about spending early on bigger gift purchases. 

They still have a lot of uncertainty about economic conditions for the rest of the year and what that will mean for their holiday budgets. Many consumers also are holding out for even better discounts, which they believe will still come during Cyber 5 and the more traditional sales days.

Another significant indicator from the Prime Day results is the split between shoppers who could take advantage of substantial discounts and buy primarily for themselves and those who passed on good deals because they don’t have the budget. 

We continue to see the impacts of inflation and rising costs impact those in lower income brackets more, while others are less impacted by these factors and have built up an even more robust safety net of savings. When it comes to holiday marketing campaigns, understanding the customers you’re speaking to, where they fall in that divide and how you need to tailor your message to them is more critical than ever.

2. Retail Media Network Growth

Retail media network (RMN) growth dominates recent industry news, with a new brand launching a network seemingly once a week. Recently, we’ve seen Uber, Lowes, and Marriott announce their own networks, and the Kroger-Albertson’s merger is making headlines because of the opportunities it presents as an RMN.

As a quick refresh, retail media networks are ad networks developed by brands built from the ground up to leverage that brand’s first-party audience data as the targeting methodology. Amazon’s network is a classic example of an RMN that houses every product search, interaction, and purchase you’ve ever made on the platform and turns that into audience profiles for other brands to use for targeting.

Cookie usage continues to fade through legislation and organic industry evolution, and RMNs present a unique way to leverage first-party data in a privacy-safe way. They can also offer end-to-end conversion tracking, which is critical for performance marketers.

Lastly, we’re now seeing RMNs enable better-targeted, programmatic in-store digital ads, bringing the entire process full circle. We predict, along with everyone else, that retail media networks will be one of the fastest areas of digital ad spend growth in 2023 and that they’ll convert more traditional dollars than any other channel other than maybe connected TV. 

3. Netflix’s Ad-Supported Tier

Netflix’s Ad-Supported tier launches today. More and more TV dollars are moving to Connected TV or OTT (over-the-top), and no more immense untapped opportunity exists than the streaming service’s audience of 223M subscribers.

There remains much to be seen about how this new ad tier works and how the ad offerings will look. Right now, 15 and 30 seconds spots are available that will run both pre and mid-roll, and Netflix announced a deal to provide some measurement through DoubleVerify and IAS (integral ad science). However, the CPMs are reported at $65 at launch, which is quite high.

There’s still a lot of speculation on how many subscribers will downgrade versus adding net news and what the overall revenue and audience impacts for Netflix will be. While beating Disney to the market is a win, we’ll have to wait and see if Netflix receives negative consumer backlash.

Conclusion

Follow Adlucent on LinkedIn, and subscribe to our blog for more content like this. Good luck this holiday shopping season; we’ll be back in early December.

Are you interested in taking your digital performance marketing to the next level? Let’s chat.

Brad Costella

Brad is a Senior Director of Strategy at Adlucent. He is a strategic, data-driven, solutions-focused marketing leader with 10+ years of experience in omni-channel digital marketing and customer acquisition. He has a passion for turning insights into actionable strategies that improve real world outcomes for advertisers and customers. He believes that success comes from finding and striking the sweet spot where customer's needs intersect with a brand's value and goals.