Connected Home Devices Are the Next Big Advertising Opportunity

How native ads can provide an enhanced experience for your audience

Connected home devices have become integral to people’s lives. Just think of a typical day: a gentle wake-up message and weather report from a smart speaker; a scan of the headlines on a tablet; cooking from recipes on a smart display; catching a favorite show on a connected TV.

Adoption of smart home devices has soared in recent years. In 2022, 90% of consumers reported owning and using a smart media device, up from 73% in 2021, according to the Kantar and Amazon Ads Connected Consumers Study. And that represents a huge opportunity for brands to reach these consumers across device screens.

Traditionally, advertising on connected home devices has appeared alongside streaming content—for example, in-stream video ads. However, there’s an untapped opportunity in native advertising on connected devices—ads that are integrated within the user interface (UI) of the devices themselves.

Native ads on Fire TV, Echo Show and Fire tablet

Native ads on connected home devices—which include display-style ads as well as video within the UI—allow brands to reach bigger screens within the connected home through a more interactive, immersive ad experience, providing a unique set of value drivers. Let’s examine the opportunity.

Connect with a valuable audience segment

Connected device customers tend to be an audience segment brands want to reach and engage, including the young-adult segment of 18-to-34 year-olds. Moreover, connected device customers tend to have significant purchasing power and are more likely to have attained higher levels of education. Surveyed Amazon connected device customers are more likely than general consumers to report having a household income greater than $100,000, being a parent and possessing at least a bachelor’s degree.

Connected device customers also over-index in certain interest groups. For example, surveyed Amazon connected device customers are more likely to be enthusiasts of health and fitness, home improvement, beauty and fashion, and are often early tech adopters.

Native advertising on connected devices, therefore, presents a valuable way to reach a younger, more affluent audience that brands are often eager to engage—including those who demonstrate an interest in certain product and service categories.

Engage customers at meaningful moments

When consumers are on their laptops or phones, they can be less receptive to advertising as they focus on completing tasks or use social media. This can make it challenging for brands to engage their customers in brand discovery. However, connected home devices can offer a unique opportunity to engage consumers at moments when they are more relaxed and receptive to brand messages.

In fact, connected consumers are three times as likely to be receptive to ads on connected devices vs. ads on social media, according to the Kantar and Amazon Ads Connected Consumers Study. Moreover, first-party signals provided by connected home devices can help advertisers create relevant experiences for their audiences, especially vital now as third-party cookies phase out.

Native ad on an Echo Show

Native ads engage audiences at key moments such as when they turn on a device, browse for content or return to the home screen. Plus, with the integration of voice assistants, these native ads can support interactive formats and provide an enhanced, immersive experience. Surveyed Amazon connected customers were 19% more likely than general consumers to respond to an ad that is interactive via remote control or voice interactivity.

Consumers use a range of devices for different purposes throughout their day, so implementing campaigns across multiple devices can ultimately help improve brand recall and consideration. For instance, an Amazon Ads automotive client ran native ads across both Fire TV and Fire tablet, leading to an 11% lift in brand awareness and 14% in purchase intent—which is 2 times and 1.6 times Kantar automotive industry benchmarks, respectively.

Reach incremental audiences and drive performance

Given the rise of connected home devices—for example, to date, over 200 million Fire TV devices have been sold globally—there are increased opportunities for advertisers to reach incremental audiences. That incremental reach becomes apparent when advertisers supplement streaming media ads with native ads. (Streaming media ads are those that appear alongside content, whereas native ads appear within the UI. Native ads offer a unique opportunity to connect with customers before they click into digital content that may not include ads.)

For instance, Fire TV native ads provided 125% greater incremental reach when added to Streaming TV ad campaigns. Additionally, only 28% of monthly viewers were exposed to both Fire TV native and Streaming TV ads, indicating that using both channels can effectively engage a larger audience.

Furthermore, native advertising on connected home devices can help drive performance across the full marketing funnel. An Amazon Ads study showed that retail brands that pair native ads on Fire TV with Streaming TV ads saw up to 153% year-over-year (YoY) awareness growth, 76% YoY consideration growth and 101% YoY add-to-cart growth, compared to a Streaming TV ads-only activation.

Connected home devices get set for commerce

As homes become more connected, we’ll see more occasions for consumers to discover brand messages and take action. From shoppable media to sequential messaging and more, the future will be one of commerce connected to smart home devices.

Given that future, native advertising represents a powerful way to meet and engage consumers in moments when they are most receptive to brand messages and when they are engaging with devices that are part of their daily routines. For brand awareness, lower-funnel performance and everything in between, advertisers should include native advertising on connected home devices as part of their media strategies.

Nikhil Nilakantan is the GM for advertising across devices and services such as Fire TV, Alexa, Prime Video and Fire tablet.