Amazon is Experimenting with Video Ads

July 4, 2019
Mitch Lepore

Mobile video ads may soon be making their way to Amazon’s ecommerce platform.

 

Hopping on the Video Wagon

It would seem that Amazon is the latest digital player to roll out a video advertising format to its platform. A recent article published on Bloomberg has stated that the ecommerce giant has begun beta testing video ads in the iOS version of its mobile shopping app, with availability expected to extend to Android devices later on in the year.

While details on formatting options for these ads are scarce, the video ads are expected to be served to users after they have conducted a search on the platform, not prior.

Brands and advertisers who are interested in deploying these advertisements will need to invest a fair amount of money to be given the ability to do so. Amazon will require marketers to spend a minimum of $35,000 to run a video campaign, with roughly 5 cents per view over a 60-day period. Depending on category, these rates may be different.

 

Expanding its Footprint

Amazon has been rapidly expanding its advertising program in recent months. Last year, it shattered early predictions of closing the year with $2.8 billion in digital ad revenue, when in actuality the company earned over $10 billion.

The earnings clearly weren’t by chance either. Amazon has been extremely busy, making a variety of changes over the past year including the consolidation of various different advertising properties, the introduction of a new content program for publishers, and the implementation of its highly-successful ecommerce channel advertising (ECA) format, which gives brands the ability to drive traffic to its listings on the Amazon platform without ever needing to redirect them to an external site. The ECA program alone has grown its advertising base by over five times its amount since January 2018.

 

Capturing a Larger Market

These moves are aimed at competing more fiercely against Google and Facebook, which – until recently – have been dominating the digital advertising market with essentially no competition. In Q4 of 2018, Amazon surpassed both companies in terms of earnings growth.

The search and social leaders aren’t shying away, however. Both have been rapidly rolling out equally as enticing new features of their own to try and maintain their holds in the market. Just recently Facebook announced that it has started beta testing a direct checkout option to its Instagram platform with select advertisers, and – in an effort to lure some of the Pinterest consumer base – Google unveiled its new Shoppable Images advertising program which leverages Google image searches.

 

Where the Money Is

Despite the growing competition in the digital realm, one key takeaway advertisers need to highlight is video – particularly mobile video. Not only are we seeing more platforms implement video advertising capabilities, but we’re also seeing mobile users dramatically change their habits when it comes to content consumption.

There has been a lot of buzz around social videos lately, which an increasing amount of users opt to spend more time watching videos on their social mobile apps than on traditional television sets – particularly younger demographics. Further to this point, we’ve also seen advertisers flexing their digital budgets, and investing more heavily in mobile videos.

To that end, it’s clear why Amazon has made the call to start getting into the video realm. Perhaps the biggest surprise is that it’s taken them this long to do it. And while the $35,000 price tag may be intimidating to smaller companies who are looking to increase their digital footprint, consider this: Amazon users are in a league of their own compared to Google and Facebook counterparts. They’re on the website either to get shopping ideas, or to make immediate purchases, so these video ads are highly likely to resonate much more effectively to the Amazon base than other platforms.

As time goes on, we’ll learn more about the video format. Until then, if you have any questions about advertising on Amazon, or video best practices, don’t hesitate to contact our performance management team.

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