Amazon set to launch mobile ads

Amazon.com has hit on a new way to grab a chunk of the $129 billion digital advertising market now dominated by Google and Facebook: sell video spots on the e-commerce giant’s smartphone shopping app.

Amazon has been beta testing the ads on Apple’s iOS platform for several months, according to people familiar with the plan. A similar product for Google’s Android platform is planned for later this year, said the people.

The brief video spots appear in response to search results on the shopping app, valuable space for advertisers since people searching for products on the app have a higher propensity to buy than those scrolling through Facebook or watching videos on Google’s YouTube.

Amazon has emerged as a fast-growing challenger in the digital advertising market since it captures 50 percent of all online sales in the U.S. Amazon’s digital advertising market share will grow to 8.8 percent this year from 6.8 percent in 2018, according to EMarketer Inc. Market leader Google will see its share slip to 37.2 percent from 38.2 percent.

Amazon, through a spokeswoman, declined to comment.

Selling more video ads opens a new revenue opportunity for Amazon’s advertising division, which mostly sells space featuring brand logos, product photographs and descriptions that are the equivalent of digital billboards. Video ad spots are similar to television commercials and can deepen the power of promotion.

Brands will spend nearly $16 billion on mobile video advertising this year, up 22.6 percent from 2018, according to EMarketer. Advertisers are shifting their spending to follow the growing number of people watching videos on mobile devices and are making brief video snippets to appeal to people on the go.