Amazon reportedly testing new video ad service on its mobile app

Amazon reportedly testing new video ad service on its mobile app

Video ad spots are similar to television commercials and can deepen the power of promotion. It's no wonder that United States giant plans to introduce ads on its mobile apps, as Facebook and Google are already doing it.

For the record, Amazon has emerged as a fast-growing competitor in the digital advertising market as it dominates 50% of all online sales in the U.S. As per people familiar with the product, Amazon is recommending 15-30 second videos, adequate for a shopper who is browsing search results.

Brands will spend almost $16 billion on mobile video advertising this year, up 22.6 percent from 2018, according to EMarketer. At the same time, a dip of about 1 percent in Google's market share of digital advertising is expected, which will pull it down from 38.2% to 37.2%. Number of people watching video ads on mobile has reportedly increased, so advertisers have also started to spend on making brief videos snippets which are common on Facebook streams and YouTube.

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Operating an ad platform on top of a service like search or social media or retail sales opens firms like Google, Facebook and Amazon to additional anti-competitive charges. Instead it used price, product descriptions and consumer reviews to determine which products were most prominent on the page. Per Bloomberg, Amazon decided its lack of video content in recent years meant that better shopper engagement and product discovery was happening elsewhere. Amazon is requiring a $35,000 ad budget to run the spots at 5 cents per view to run the ads for 60 days, one person said.

Notably, the e-commerce portal already includes buying guides, product videos, how to's and DIY videos on its site and if the report turns out true, the new video ads will be an add-on to the list. Analysts note that the new mobile video ads are an expansion of features the company has tried on its own products including the Fire TV and the Kindle reader. The initial sense was that any kind of advertising might be seen by the customers as a distraction to their main intention of shopping on the site.