Amazon to introduce video ads in mobile-app search results — report

Amazon.com is starting to roll out video advertising on its smartphone apps. Currently, nearly every search result yields a graphical ad unit at the top of the SERP. According to Bloomberg, video ads for relevant products will start to appear in those same positions.

The report says that “Amazon has been beta testing the ads on Apple Inc.’s iOS platform for several months,” although I was not able to find one of these units after numerous product queries. Amazon’s mobile app for Android will apparently be getting video ads later this year.

Minimum $35,000 ad budget. The Bloomberg report quotes unnamed persons familiar with the matter and says that “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. Prices can vary by category and not everyone pays a fixed rate, said another person.”

Amazon has not directly reported ad revenues in earnings. It’s grouped in with “other,” which is dominated by ad revenue. In Q4 2018, Amazon reported $3.4 billion in “other” revenues, which means its advertising business exceeded $10 billion in 2018.

Budgets coming from search and social. Some articles will play up the “threat to Google and Facebook” angle. Often that’s just a perfunctory way to create drama. There is evidence though that marketers are shifting budget from search and social, according to our recent Amazon advertising survey. That tends to be more true for smaller marketers (sub-$10 million in revenue); but it was true across the board in the survey.

Amazon has been building out its ad portfolio over the past couple of years. It has launched a number of new seller offerings and advancements for marketers, though it has a way to go to reach parity with Google or Facebook in terms of tools and reporting.

Why you should care. Amazon has now become the third largest ad platform in the U.S., behind Google and Facebook. More people start product searches on Amazon than Google.

These high-intent search queries will make the new video units desirable for product marketers. Video ads will likely see high engagement and perform well because of their relevance on the SERP.