Till date, Amazon only features product photographs and brand logos in app ad space, but video ads will empower product promotion for Amazon. The report citing people familiar with the matter said that the mobile ads for the Android platform are planned for later this year.
In the past, Amazon had been reluctant to load up its platform with intrusive advertising that would interfere with the shopping experience, but the company's approach continues to be more inclusive of advertising as revenue from ad sales grows rapidly, in part because Amazon offers some key advantages for brands over Facebook and Google, the dominant platforms.
Based on full-year data from both companies and the rest of our analysis of the USA ad market, we now estimate that Google's share dropped less than we anticipated (1.4 points), and Facebook's share grew more than we predicted (2 points).
Amazon has emerged as a fast-growing challenger in the digital advertising market since it captures 50 percent of all online sales in the US. Indeed, eMarketer predicts that companies will spend nearly $16 billion on video ads alone this year as such content becomes increasingly popular among smartphone users. Amazon is already faring better on the digital advertising space by increasing its market share by 2% in one year.
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In the absence of these videos, customers on Amazon would go to YouTube to watch the video of the product and then come back to make the purchase.
With more consumers shopping on mobile, and Amazon's app a popular method for accomplishing this, video ads could turn into an important offering for Amazon.
Amazon hasn't commented thus far about its mobile video ad plans.
Reportedly, Amazon has decided ad budget of $35,000 to run spots for 60 days at variable price of 5 cents per view depending upon the category.
"They roll out these new experiences slowly to see if it disrupts the shopping experience and see if it's something advertisers want", he said.