Amazon already offers a variety of different ways to allow companies to advertise on its platform, though these new video ads could things a step further.
Bloomberg said the idea is to generate more revenue for Amazon's advertising division, which is now focused on selling ad space that features brand logos and product photos.
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As per the speculations made by EMarketer, Amazon may raise its share of the digital advertising market from the existing 6.8 percent to 8.8 percent. Amazon has been testing beta version on Apple Inc.'s iOS platform from several months. Google LLC remains a much bigger player, however, dominating the digital ads sector with a 38.2 percent share of the market in 2018.
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Running video ads triggered by product searches within Amazon's closed environment in the shopping app on the mobile phone could prove lucrative for the marketplace.
The people familiar with the report have stated that the Amazon Said to launch mobile ads to the iOS and later down the year, the video ads will embrace the Amazon for Android mobile app. Analysts note that the new mobile video ads are an expansion of features the company has tried on its own products including the Fire TV and the Kindle reader. Such ads are common on YouTube and in Facebook streams.
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Earlier, the online retailer used product descriptions, consumer reviews to determine which product was more relevant on a particular page. Amazon is requiring a $35,000 ad budget to run the spots at 5 cents per view to run the ads for 60 days, one person said. Still, this is expected to be a slow roll-out to see if it disrupts customers' shopping experience, so there's that. Amazon added more product videos to its site two years ago to dissuade shoppers from going to YouTube or Instagram to watch video demonstrations and testimonials from influencers. "This creates a new format for them and another way to sell space on the platform".