E-Commerce and Product Placement - Match Made in Heaven!

Earlier today Time published news about Amazon's latest experiment. In a nutshell, Amazon streams a cooking show through its Prime Video Streaming Platform while selling featured items online with just one click. This is amazingly genius! World's largest e-retailer produces TV shows for the streaming platform it owns, makes money through product placements, and then sells the items its shows promote. Welcome to the future where e-commerce meets product placement!

Today was (to my knowledge) first and so far only time Amazon has combined its streaming and commerce businesses. I am confident that we will be seeing Amazon taking this model further in the future. Here are my thoughts what to expect and why.

Let’s start with why. I see three trends paving the way shopping opportunities built into entertainment.

1) We are lazy, and we want everything now.

Instant gratification has become an important driver in our decision making. We, consumers, want everything as fast as possible and with as little effort as possible. Preferably from our sofa. Just one example here.

2) Technology is making shopping smarter.

Latest technological achievements in the field machine intelligence have sprung out various virtual assistants (for example Apple’s Siri and Amazon’s Alexa). By simply speaking to our devices, we can ask them to complete tasks for us. For example, Alexa can order a limited selection of items from Amazon. It also just happens that Amazon has its Fire TV streaming box with built-in Alexa.

3) Streaming services are harmonising showtimes.

Do you remember times when you were forced to wait for a year or more for a hit show's latest season after its premiere elsewhere? (Yeah, I know. We still often do here in Finland!) Now the landscape is changing as streaming services like Netflix, HBO, and Amazon Prime make their shows available globally at the same time. Harmonized showtimes mean larger audiences for product placements while products are still on the (virtual) shelves.

What can we expect in the near future:

1) You can order what you see on TV effortlessly and instantly.

In the near the future, you can give your TV (or to whatever virtual occupies that space) a command: ”Buy me the clock Harvey Specter is wearing." The clock is shipped to you during the same day, and you do not need to get up from the sofa or even reach for your favourite device.

2) New models for product placement campaigns.

Produce a show, make product placement deals, and then sell those featured items (through TV or online) is a model for the future. If the sales happen through a channel like Amazon Prime, they can be tracked and combined to viewing history. With this kind of data, product placement can be done with performance based model.

3) Item recognition enables ad sales.

Item recognition technology is advancing in huge leaps and use cases in e-commerce exist (one example here). Next, Amazon Prime (or other streaming service or your smart TV) can recognise items from the program and show an (hopefully unintrusive) ad for that or a similar product making it easy to buy on the spot.

Amazon is about to change product placement and TV advertising and as we know it.