By
Godfrey Benjamin
April 23rd, 2024
E-commerce giant Amazon is going to sell video ad spots on its mobile shopping app, which will be a great revenue opportunity for the company.
According to the recently revealed information the e-commerce giant Amazon.com, is trying to win a larger share of the $129 billion digital advertising market and is starting to sell video spots on its smartphone shopping app.
At the current moment, there is a graphical ad unit at the top of the search engine results page (SERP) of almost every search result. Now, video ads for corresponding goods are to appear just in the same positions.
As it has been reported by some people familiar with the issue but preferred to stay unnamed, beta testing of the ads on Apple Inc.’s iOS platform has been taking place for several months already. Amazon’s mobile app for Android is planned to get video ads a little bit later
It is also said that there is a similar product to be launched on Google’s Android platform. Nevertheless, there is no any official information yet.
The brief video spots that appear on SERPs is a rather powerful tool for advertisers which makes it extremely valuable even in comparison with Facebook and YouTube’s ads. If a person is already searching for some goods in a shopping app, it means that he or she is ready to purchase it which increases the efficiency of the ad.
Selling video ads is considered to be a great revenue opportunity for the e-commerce platform. Previously, the main revenue flow from ads used to be generated from selling space featuring brand logos, product photographs and descriptions. While they are the equivalent of digital billboards, video ad spots can be compared to television commercials and have a more significant promotional power.
According to experts, this year around $16 billion will be spent by companies on mobile video advertising which is 22.6% more than in 2018. Given the current people’s preferences to watch videos on their mobile devices, advertisers have already started to invest more money namely in this ad channel. Such short video ads are common in Facebook streams and on YouTube.
The budget requirement for running the spots at 5 cents per view to run the ads for 60 days on Amazon is $35,000. Nevertheless, there can be different prices for different categories. Moreover, not all rates are fixed.
Is It a Threat to Google and Facebook?
Now the market of digital advertising is dominated by Google and Facebook but what does the appearance of a new serious player mean for them? Is it a real threat? Or maybe everything is too exaggerated?
It has been found out that marketers are shifting budget from search and social. Especially, it is true when we speak about smaller marketers with sub-$10 million in revenue.
It is not the first attempt of Amazon to work with ads, it has been actively working with it over the past several years and has been offering various tools for marketers.
Nevertheless, it still hasn’t achieved the level of Google and Facebook in this aspect, so, it can be concluded that these two giants have nothing to worry about. At least, at the current moment.