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.
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Data from EMarketer Inc., however, shows that Amazon will grow its slice of the digital advertising market from 6.8% last year to 8.8% this year, while Google's is expected to slip 1 percentage point - from 38.2% to 37.2%.
As per sources, the video ad spots will offer valuable space for advertisers as shoppers searching for products on the app have a higher tendency to initiate purchase rather than watching product videos on Google-owned YouTube or scrolling through Facebook. Amazon is already faring better on the digital advertising space by increasing its market share by 2% in one year. Bloomberg is reporting that the company is beta testing putting ads on its mobile apps.
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Mobile video ad spending in the U.S.is expected to rise 22.6% to $16 billion in 2019, and continue growing every year until it hits almost $25 billion in 2022, according to eMarketer. Earlier, only the product descriptions and consumer reviews were available for the users to make up their mind.
With shoppers seeking out other destinations like YouTube, Instagram for product demonstrations and testimonials, Amazon began adding more product-related video content two years back, to prevent shoppers from switching to these channels.
Amazon putting video ads inside search results could disrupt the shopping experience for customers, which is why this seems like a very slow rollout.
Amazon requires marketers to spend $35,000 to run the spots at 5 cents per view for 60 days, although those prices vary by ad category, per Bloomberg.