E-commerce giant Amazon has made a name for itself in the mobile device world with its Kindle e-reader and Fire HD tablet. Now, the company plans to give Google and Facebook a run for their money in the mobile advertising arena.
Amazon is launching a new advertising platform aimed at mobile app developers who want to promote their apps on Android devices, according to a post on Amazon’s developer blog.
“We work with many developers to support merchandising and advertising across our platforms and devices,” said Amazon spokeswoman Lyn Hart in a published statement. “We realized that many more developers would benefit from this advertising and merchandising.”
Amazon Has a Miniscule Market Share
Could Amazon have read eMarketer’s latest mobile ad spend report? The global mobile advertising market will hit two significant milestones in 2015, according to new eMarketer figures. First, it will pass the $ 100 billion in spending mark. Second, it will make up over half of all digital ad expenditure.
“The $ 101.37 billion to be spent on ads served to mobile phones and tablets worldwide next year represents a nearly 430 percent increase from 2013,” eMarketer said in its report. “Between 2016 and 2019, the last year in our forecast period, mobile ad spending will nearly double, hitting $ 195.55 billion to account for 70.1 percent of digital ad spend as well as over one-quarter of total media ad spending globally.”
Amazon will have an uphill battle to win mobile advertising marketshare. According to eMarketer, Google has a declining portion of the mobile market but should settle in at about 33 percent by 2016. Facebook has about 15 percent of the market, followed by Twitter and Yahoo with about 4 percent each. Others in the mobile market, like Pandora, Apple, Yelp, LinkedIn and Amazon, have a percent or less of the pie.
How Amazon Can Compete
We caught up with Greg Sterling, Vice President of Strategy and Insights at the Local Search Association, to get his thoughts on Amazon’s mobile aspirations. Can Amazon truly compete against Facebook and Google in a mobile world? Sterling told us Amazon certainly has the capacity to generate mobile ad revenue. The central issue is reach, he added.
“Right now it’s not a mobile hardware force — the Amazon smartphone is a major flop and the company is unlikely to have much success there unless it aggressively subsidizes the next Fire phone — and its mobile assets are pretty modest,” Sterling said.
If Amazon can build greater volume and ad inventory for developers, which could include an ad-network acquisition, it could become a bigger player in mobile advertising, according to Sterling. “However, right now it stands very little chance of being a major competitor to Facebook or Google in mobile advertising.”
