How Fire TV can help advertisers extend their net reach

With Fire TV, brands can gain incremental reach without changing their existing TV advertising budgets.

Story highlights:

In 2021, there will be an estimated 213.7 million streaming TV viewers users in the US – a total of 63.8% of the population.1 And the streaming TV audience is expected to keep growing, year over year, to 230 million in 2025.2

With the majority of US viewers now streaming content, brands are investing more in streaming TV ads. It’s projected that spending will exceed $4 billion this year,3 as advertisers seek to reach audiences on this channel.

Fire TV is Amazon’s streaming TV ad solution that allows customers to easily stream shows, movies and sports from multiple providers. More than 50 million monthly active viewers worldwide use Fire TV to access their favourite content.4

If you’re a brand that’s considering advertising on Fire TV, you may be curious about whether Fire TV can help you reach more new customers. You may also be wondering what makes Fire TV customers distinct from linear TV viewers. Similarly, you might also want to know if Amazon’s streaming video ads product can help you reach your customers, even if you don’t sell products in Amazon’s store.

To answer those questions, we analysed proprietary Nielsen Media Impact (NMI) insights and optimization algorithms applied to 51 brands to express the incremental reach brands can gain by including Fire TV in their media budget. The 51 brands consisted of 26 brands that sell products or services on Amazon and 25 brands that do not sell products or services on Amazon.

Here are our key learnings:

1. Advertising on Fire TV increased reach by 39%

Incorporating Fire TV into a TV media plan extended advertisers’ reach without changing their existing TV advertising budgets. Advertisers were able to achieve more reach by adding Fire TV to their media plans, whether or not they sold products in Amazon’s store; on average, brands increased their net reach by 2.2 points.

The greater reach occurred because linear TV would not have reached approximately 39% of the Fire TV audience – thus increasing the potential audience.

Net incremental reach provided by Fire TV (percentage points)
Incremental reach provided by Fire TV for endemic and non-endemic brands
Percentage of Fire TV audience that isn't reached by linear TV
Endemic brands have higher percentage of Fire TV audience not reached by linear TV
Distribution of change in linear TV reach when Fire TV is added to media plan (basis points)
Larger distribution of change in linear TV reach for endemic brands
Orange circle key: Endemic

Endemic

Yellow circle key: non-endemic

Non-endemic

2. Fire TV is popular among millennial audiences

There’s a demographic difference between Fire TV and linear TV audiences. A 2019 Nielsen study NMI insights shows that a high share of Fire TV users are millennials, with 44% of Fire TV users falling between 18 and 39 years old. Linear TV viewers, on the other hand, tend to be Gen X and Baby Boomers; only 34% of adult linear TV viewers are under the age of 40.

This means that incorporating Fire TV into TV ad budgets can be particularly useful for advertisers who want to reach a millennial audience. Advertisers of products and services that millennial consumers disproportionately purchase, like video games, may receive the greatest benefit from advertising on Fire TV.

Age distribution: Fire TV users and linear TV viewers

Graph showing age distribution between Fire TV users and linear TV users

Y = age

Fire TV users

Linear TV viewers

Age comparison: Fire TV users and linear TV viewers

Graph showing age comparison between Fire TV users and linear TV viewers

Y = age

Higher portion of demographic use linear TV

Higher portion of demographic use Fire TV

In conclusion, advertising on Fire TV can help brands increase their reach – without increasing their TV media budget whether or not they sell products on Amazon. For brands that do sell on Amazon, or are looking to reach millennial audiences, advertising on Fire TV can also be effective.

Research Methodology

Optimisation algorithms

We used machine learning algorithms to test the theoretical performance of advertisers’ media plans. The algorithm optimises each brand’s linear TV dollars across broadcast, cable, syndicated and Fire TV to maximise net reach, or the total audience that would receive one or more ad impressions. The output shows that allocating the optimised portion of its linear TV budget to Fire TV would have increased each brand’s total net reach by an average of 2.2 percentage points. The output also shows that approximately 39% of the audience reached by Fire TV would not be reached through broadcast, cable or syndicated ad impressions.

1 Connected TV users, US, eMarketer, February 2021.
2 Connected TV users, US, eMarketer, February 2021.
3 “US upfront CTV ad spending will surpass $4 billion this year,” eMarketer, 2021.
4 Amazon Advertisers can now reach more than 50 million monthly active users on Fire TV.