Amazon Tees Up Kindle to Make a Play for Serious Ad Dollars
With all the hoopla surrounding last weekâ€™s Facebook IPO (which looked like more fizzle than sizzle), itâ€™s easy to overlook the other hot game in town: the tablet market. The fact is, tablets today represent a more effective online ad platform than Facebook.
Amazonâ€™s latest ad play suggests the potential for tablet advertising will only intensify. According to ad industry publication Ad Age, Amazon, flush with Kindle Fire sales, is visiting ad agencies and pitching them on the idea of a major ad program for their clients. Reportedly, Amazon would like to sell an advertising package that includes an ad appearing on Kindle Fireâ€™s welcome screen. The potential price tag: a cool $600,000. And for $1 million, reports Ad Age, an advertiser would not only get more ads but â€œbe included in Amazonâ€™s public-relations push.â€
Ads in Preparation for New Amazon Products
Amazonâ€™s ad activity is very likely connected to new products soon coming from the company. In July, according to Reuters, Amazon will launch new versions of both the Kindle and Kindle Fire based on E Ink technology that features front lighting so the e-readers can function in the dark without an additional light source. This is already being offered in the Nook, a competing device from Barnes & Noble. Later in the year, reports Reuters, Amazon plans to come out with an upsized Kindle Fire that might more closely resemble Appleâ€™s iPad.
Amazon has indicated that sales of the Kindle Fire have been on fire since the end of 2011, when it was selling more than a million total Kindle devices on a weekly basis. Potential advertisers will be interested to know that Millennial Media, a mobile ad platform, reportedÂ late last year that the Kindle Fire is logging â€œhundreds of millionsâ€ of user ad impressions every month.
Â An Apple-Amazon Media War
While itâ€™s intriguing enough to see the undisputed tablet leader being challenged by the undisputed e-commerce leader, the real story may be the developing media and advertising war between Apple and Amazon. Tablets, after all, are nothing more than windows into applications and the online universe. Apple has done a superb job of building a case for the iPad with its portfolio of applications, many of which subtly and not-so-subtly rely on advertising. Meanwhile, the iPad opens the door into Appleâ€™s media world, encouraging the use of iTunes, iBooks, and the like.
The same can be said of Amazonâ€™s Kindle Fire. I remain convinced that this device is not intended to be a stand-alone product. Last October, I wrote that Amazon is more Google than Apple, creating an online world that uses devices to support it. Itâ€™s not about Kindle Fire at all â€” thatâ€™s just an entry point to the gigantic Amazon online world and all it offers. On the surface, Kindle Fire may look like an iPad killer, but I think itâ€™s more akin to Gilletteâ€™s legendary razor strategy: You sell the razor so the consumer buys the blades, time and time again. Kindle Fire is Amazonâ€™s razor; its blades are its ever-growing mass of digital content and everything else it has to sell.
Ad Age wonders whether Amazon is moving toward something akin to Appleâ€™s iAD, the ad network that places ads within apps on iPhones and iPads. â€œIndustry sources speculate that Amazon is attempting to build a competitor to iAD,â€ reports the publication.
Microsoft Joins the Party
Thereâ€™s another player that recently came to the tablet table. In late April, Microsoft invested $300 million (chump change for the company) in the above-mentioned Nook, a competitor to the Kindle which has also evolved into a tablet. Not surprisingly, the move is all about two things â€“ broadening Microsoftâ€™s content offerings and gaining access to new markets. According to an analysisÂ of the investment in the Washington Post, â€œBreaking into the college market â€“ through Barnes & Nobleâ€™s many university bookstores â€“ is a smart way to target students who might appreciate a cheaper option than Appleâ€™s iPad for reading e-books. Microsoft could also push what will likely be cheaper tablets running Windows RT.â€
Microsoft, a perennial rival, has cooperated with Apple over the years when it was to its mutual advantage. But the Microsoft presence just adds to the bubbling media and advertising cauldron spawned by the popularity of the iPad. Combine the continuing advance of the iPad with Microsoftâ€™s investment in Nook and itâ€™s no wonder that Amazon is trying to grab ad revenue for its Kindle Fire, now rather than later.
About Barry Silverstein
Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the worldâ€™s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.