Amazon to Compete with Google and Facebook with its Own Mobile Ads

Citing people familiar with the matter, a report by Bloomberg is claiming that Amazon will soon start selling video spots on its smartphone shopping app, as the company plans to compete with the likes of Google and Facebook in the $129 billion digital advertising market.

The report notes that Amazon has beta testing the ads on iOS for the past few months, with a similar product also planned for Android later this year.

According to the source, brief video spots appear in the app in response to search results, providing valuable space for advertisers since people searching for products on the app are more likely to buy than those scrolling through Facebook or watching YouTube:

Selling more video ads opens a new revenue opportunity for Amazon’s advertising division, which mostly sells space featuring brand logos, product photographs and descriptions that are the equivalent of digital billboards. Video ad spots are similar to television commercials and can deepen the power of promotion.

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. Prices can vary by category and not everyone pays a fixed rate, said another person.

A recent report by EMarketer found that brands will be spending nearly $16 billion on mobile video advertising this year, up 22.6% from 2018.