After disrupting the retail and e-commerce space, Amazon is now setting its eyes on the digital advertisement market, which is estimated to be worth $129 billion. This market has so far been dominated by companies like Google and Facebook. Bloomberg reports that the ecommerce giant will serve adds to users of its shopping app on smartphones to demonstrate products they search for. The advertisers will be permitted to air short ads.
Beta testing of this already on in iOS devices. It is reported that this beta testing has been on for a few months at least now and that the Android users may also get to use the feature on their phones soon.
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. Now if the pitching of the product with a video is made right there, the need to go to YouTube may not exist. Amazon’s gain could be loss to YouTube. Amazon is already faring better on the digital advertising space by increasing its market share by 2% in one year. Google’s has dropped by 1% in the same period.
Unconfirmed reports suggest ad advertiser might have to shell out $35,000 for a video that will run for 60 days on the site and the amount is a rough estimate based on a charge of 5 cents per view. The trend of watching videos on mobile phones has grown in the past few years and the overall plan by Amazon will be aimed at capitalizing on this trend.
It is also seen as a paradigm shift as far as the ecommerce company’s policy towards customer experience on its site is concerned. 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. From there to allowing video ads is a long way that Amazon has travelled. Amazon has had some experience with these ads on its other platforms, like Fire TV and Kindle e-readers.