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What is Amazon VPP?

Amazon Unveils New Virtual Product Placement (VPP) Program Amazon’s presentation at this month’s “Interactive Advertising Bureau’s NewFronts” brought the announcement of new Amazon advertising products, including ad formats that use virtual product placement (VPP) tools. The VPP program is currently in beta, and allows advertisers to digitally place branded products into streaming content post-production.
Written By Tristan Williams
Published on May 24, 2022   |5 minute read

Amazon Unveils New Virtual Product Placement (VPP) Program 

Amazon’s presentation at this month’s “Interactive Advertising Bureau’s NewFronts” brought the announcement of new Amazon advertising products, including ad formats that use virtual product placement (VPP) tools. The VPP program is currently in beta, and allows advertisers to digitally place branded products into streaming content post-production.

What is Virtual Product Placement (VPP)?

Virtual product placement is an advertising tool and post-production technique for inserting a brand into a TV show or movie scene. VPP allows a product—such as a candy bar, car, or brand of pet food, to be placed into an already filmed or already produced television program or film. Virtual product placement can occur years after filming and does not require all the planning and pre-approval prior to filming and production that traditional product placement requires. VPP can also be customized for a specific broadcast date, creating a new revenue opportunity for each broadcast. VPP could potentially even be customized for different viewers.

For example, using VPP technology a billboard seen within an Amazon Prime episode can be continuously changed to feature different product placements throughout the show’s time on the streaming platform. 

Who is Beta Testing Amazon VPP?

Recently, Amazon’s free ad-supportedTV service IMDb TV was rebranded into Amazon Freevee. The VPP program is currently in beta and has already been implemented in several Prime Video and Freevee original series.

In the future, brands will be able to buy VPP through their agency if they have a DSP seat. Some larger advertisers may have access through their own DSP seats as well. Firms are given the support of VPP reps as they are in beta and launching this ad product.

The Benefits of Amazon VPP

Currently, Prime Video is a major streaming destination but doesn’t support traditional ads. In addition, traditional product placement deals have been limited to whatever advertisers had planned and agreed on prior to filming. VPP brings the benefits of flexibility and opens up more options for producers and advertisers, as brands can digitally insert themselves strategically into scenes in shows and movies even after filming ends.

For television and film production teams, VPP will ideally allow for a more seamless integration of product placements. Producers will be able to watch the final cut of an episode or movie and see where a product could be naturally integrated without disrupting the story.

The obvious benefit for Amazon is the ability to use VPP to introduce new ads in the future and remonetize a piece of content repeatedly. VPP will also let companies strengthen their audience reach, which in turn gives Amazon programming more exposure.

How Does VPP Work?

Amazon presented a video at NewFronts to demonstrate how the new VPP program enables brands to strategically and seamlessly integrate product placement post-production. The video demonstration features a scene with an M&Ms billboard that was digitally added to a television show after it had already been filmed.

Amazon has already seen some early success during beta testing, stating that after using VPP, a CPG business saw a 14.7% increase in purchase intent for their campaign, and a 6.9% increase in brand favorability.

Peacock Announces Similar Technology with “In-Scene” Ads

At NewFronts, Amazon presented its new VPP tool, and Peacock presented its own new post-production ad tech, “In-Scene” ads. Peacock In-Scene ads promise to identify ideal moments within movies and TV shows for product placement, and digitally insert a brand’s customized messaging or product post-production.

Envision Horizons’ First Thoughts on VPP

Experts at Envision Horizons are sharing their first thoughts on Amazon’s new VPP program…

Envision Horizons founder and CEO, Laura Meyer, explains “TV advertising has been viewed by digital marketers as old school upper funnel and brand awareness marketing, and VPP bridges to reach of television with the sophistication of digital marketing, while still being subtle to customers.” 

Laura states “I am going to be really interested to see the scale that VPP offers brands since there is a 6-week lead up to launch and having the right placement is going to be really important. I also see this as a way for Amazon to make a larger business case for producing high-cost original content. In 2021, they spent $13 billion alone producing content, all of which is complementary to the Prime Customer. In typical Amazon fashion, they are using advertising revenue to subsidize the cost of being a customer obsession company.  Content competitors like Netflix have had their margins squeezed and I wouldn’t be surprised if this technology inspires other streaming TV companies to do something similar. Netflix announced tough earnings in March with a declined net margin down to 16.47%.”

The Envision Horizons team is excited about the VPP technology, and the possibility to create a more seamless advertising experience over more invasive ads at the beginning or in the middle of content. Our team is keeping a close watch on Amazon’s VPP beta testing and is very interested to see how the new program will initially perform.

Sources:

​​https://techcrunch.com/2022/05/17/virtual-product-placement-ads-are-coming-to-amazon-prime-video-and-peacock/?guccounter=1

https://www.fiercevideo.com/advertising/amazon-unveils-virtual-product-placement-beta-newfronts

https://www.marketingdive.com/news/amazon-streaming-newfronts-FreeVee-Twitch-NFL/623078/

https://deadline.com/2022/02/amazon-originals-film-tv-prime-video-spending-2021-1234926697/

https://www.macrotrends.net/stocks/charts/NFLX/netflix/profit-margins#:~:text=Profit%20margin%20can%20be%20defined,31%2C%202022%20is%2016.47%25.

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