Amazon Killing Ads for Unprofitable Items Is Its Latest Ruthless Money-Grab

Amazon is testing video adverts for its Android and iOS apps

Amazon ads are nothing new

You may soon be greeted with video ads while shopping on Amazon's Android and iOS apps as the company is now said to be prepping the rollout of "video spots". Google is also reportedly planning to launch similar product for Google's android platform later this year.

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.

Amazon expects that people exploring on its application have more chances to buy than those exploring Facebook or YouTube by watching mobile ads which will appear in response to search results on shopping app.

Amazon has grown fast in digital advertising market as a challenging competitor after capturing 50% of online sales in the United States.

Brands will spend almost $16 billion on mobile video advertising this year, up 22.6 percent from 2018, according to EMarketer. Digital advertisingmarket share of Amazon will increase from 6.8 percent to 8.8 percent in 2018, while Google will drop from 38.2 percent to 37.2 percent.

It turns out people searching on apps have a higher propensity to buy than those scrolling through Facebook or watching videos on YouTube, according to the report. Bloomberg is reporting that the company is beta testing putting ads on its mobile apps. A spokesperson for Amazon told the site that it "decides which products to market and promote in our stores based on a variety of factors, such as relevancy, availability, profitability and other factors".

In the absence of these videos, customers on Amazon would go to YouTube to watch the video of the product and then come back to make the purchase.

Amazon hasn't commented thus far about its mobile video ad plans.

"They roll out these new experiences slowly to see if it disrupts the shopping experience and see if it's something advertisers want", he said.

Amazon requires marketers to spend $35,000 to run the spots at 5 cents per view for 60 days, although those prices vary by ad category, per Bloomberg.

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