Amazon, in an attempt to capture a piece of the $129 billion digital advertising space, will sell video ad spots on its mobile app, according to a report from Bloomberg.
The initiative has been in the beta stage for a few months on Apple’s iOS platform, with plans to bring it to Android later in the year. The spots will appear after a user searches for something on the shopping app, the rationale being that people who search for products within the app tend to purchase more often than those who are perusing Facebook or YouTube.
Amazon, which captures about half of all online sales, has been steadily growing its footprint in the digital advertising space. The company’s digital ad market share is expected to go up 2 percent this year, from 6.8 to 8.8 percent, according to EMarketer. Google is expected to lose share and drop to 37.2 percent from 38.2 percent.
Amazon’s advertising space currently sells space for brand logos, photos and descriptions of products, which are basically the equivalent of static billboards. The reason Amazon hasn’t delved into video is because it didn’t want to hamper the shopping experience for its users, so instead it used information about the product itself.
Brands are expected to spend more on video ads this year, as the medium becomes more and more common on smartphones. They are expected to spend almost $16 billion on video ads, which is up 22.6 percent in 2018.
Advertisers are increasingly spending money on brief ad snippets as people continue to shift viewing habits; these types of videos are already fairly common on Facebook and Google.
Amazon will require a $35,000 ad budget to run spots at five cents per view for about two months. The prices can vary by category, one unnamed source told Bloomberg.
Collin Colburn, an analyst at Forrester Research, said it opens new avenues for Amazon. “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. “This creates a new format for them and another way to sell space on the platform.”