Twitch is starting to take steps that meld its ad platform with parent Amazon.
From the perspective of marketers, the opportunities are exciting, even if they lead to some grumbling among Twitch’s vocal user base. Brands like Chipotle, Hershey and General Mills see the potential of working with Twitch to reach its audience of hardcore gaming fanatics, and now there is this new channel emerging that could tie major brand campaigns on Twitch to direct sales through the traditional online ad marketplace run by Amazon.
“We have made an announcement that we’ve joined together,” says Sarah Iooss, head of sales for the Americas at Twitch, referring to Amazon incorporating Twitch into its ad platform. “And we are going to be bringing our marketing partners the best of both worlds, and that will definitely impact how we go to market and what kind of ad products are available.”
Light the fires
In September, Amazon took its biggest steps since buying the company in 2014, bringing Twitch into the Amazon Ads Platform. So far, it’s a limited integration with marketers in Canada, Japan, Spain and Italy using the self-serve Amazon Ads Platform to place ads within Twitch.
A recent advertising pitch deck (below) shows how Twitch has tried to motivate marketers with its attractive audience. It’s an audience of mainly young (70% of Twitch users are younger than 34 years old), male gamers, who are elusive and desirable for brands. The pitch deck describes all the ad formats available—including “first video impression takeover” ads that run the second a viewer opens a livestream channel (an ad format also being used by Snapchat) and the “premium video,” which are described as “ad block resistant” and “unskippable.” That kind of language could spell trouble for Twitch with its gamer audience, since it’s a community notorious for deploying ad blockers and recoiling at the site of brands.
Still, it’s the gaming crowd that is most appealing to brands. While gamers are known for their aversion to overt advertising, they can make loyal customers. “Esports fans have responded to surveys indicating that they would go out of their way to actively support a sponsor of their team,” wrote Maria Ripps and Michael Graham, senior analysts, in a recent investor report from Cannacord Ingenuity. “This likely increases the ROI presented by esports and attracts ad dollars.”
Twitch touts 26.6 million visitors a day in the second quarter and 159 million viewers a month. Twitch is seeing a surge in usage, especially during the COVID-19 pandemic, when more people are looking to form online communities. Twitch has an active user base of streaming video creators, members of the online “influencer” set, who are known for playing popular video games and competing in esports tournaments. They play games that most people never heard of and worship gaming stars with screen identities that are hard to follow.
There are popular action games like “Call of Duty,” “League of Legends” and “Fortnite.” There are sports games like “NBA 2K21,” and surprise hits like the recent popularity of “Among Us” and “Fall Guys.” The Twitch stars, attracting brand sponsorships, have online identities like Axion Jaxon, TeePee, DrLupo and CouRageJD.
What Twitch does not mention in the pitch is that Amazon now has access to that audience, a sure sign that ads will be more abundant.
“When a program like Amazon Advertising meets with that consumer that’s coming to Twitch, as a brand that’s really powerful data that you can use to start to show your products to specific consumers,” says Nancy McLaughlin, director of search and enterprise services on the marketplace team at Tinuiti, a digital agency that specializes in Amazon, Facebook and Google ads.
McLaughlin notes that the Amazon-Twitch ad union is only open to media buyers in select regions, but so far it shows the potential. Marketers on Amazon, which has its own booming ad business, can serve targeted ads to Twitch through the Amazon DSP—demand-side platform.
“We can now target Twitch game viewers as part of an audience that we’re building out, we can then target Twitch non-game viewers, people that are not gaming and they’re only logging on to Twitch as a viewer,” McLaughlin says.
There are indications that the ads are creeping into the platform at a noticeable velocity.
Experimental dance
There are indications that the ads are creeping into Twitch at a noticeable velocity.
Last month, there was a small revolt among a few of Twitch’s hardcore users who started seeing unwanted ads pop up in the middle of their livestreams. It was just an ad test that placed “mid-roll” commercials within the videos in a new way, without being enabled by the person creating the video. Twitch had, until recently, only enabled mid-roll ads when the person creating the video requested them. Twitch stepped back from the test after the backlash.
“We did have a limited ad experiment where a really small number of viewers did receive mid-rolls that were initiated by Twitch, not the creators, but we are absolutely evolving that,” Iooss says. “We’re trying to create more opportunities and more innovation for our ad partners and more monetization opportunities for our streamers. So we are going to do experiments like that.”
