Great, Amazon is going to add video ads to its shopping app
This is why we can’t have nice things.
Amazon has been beta testing video ads on the iOS version of its shopping app, with the same feature coming to the Android apps later this year. It looks like Amazon has set its eyes on the digital advertising market, which is currently dominated by Google and Facebook, by leveraging its own platform to rent ad space.
Currently, when you search for products on Amazon’s app, you get at least one static advert at the top of your search results. That space will now also have video advertising, with brief adverts in the prime position, according to a report in Bloomberg.
With video ads sticking more in the mind of viewers, that new space will open up revenue for Amazon both for ad buy and crucially, for product sales. Add the percentage that manufacturers pay Amazon to use the sales platform and you can see Amazon is taking a cut whichever way you look.
Brands will spend around $16 billion in total on video advertising in 2019
This is according to EMarketer, and that figure is projected to rise to $22 billion by 2022. This is driven by a shift from static ads to video ads, which have proven to work on platforms like YouTube or Twitch. Amazon might have resisted putting advertising on its site while it was building up the shopping experience, but now that the userbase is established it seems the gloves have come off. Expect Amazon’s share of the advertising market to rise steadily over the next few years.
This leveraging by Amazon of its own marketplace to sell extra advertising is a prime example of what Elizabeth Warren is calling to abolish in her “break up Big Tech” speeches. With Amazon already using all the data from its sales platform to inform its own advertising, it could go on to use that data to set pricing for third-party advertisers based on sales figures, or any other metrics they choose.
It also locks off other advertisers from the platform, unless they pay a percentage to Amazon, who essentially has a captive audience. With the shopping giant controlling 50-percent of all online retail in the US, that’s a problem.
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