Bringing advertisements to the Kindle line changed the way that eReaders were priced. The competition has only recently been able to begin matching Amazon’s listings. Interestingly, Amazon has also surprised customers by offering advertisements that occasionally bring genuine value to them beyond the initial price drop in hardware purchase. Integration with Amazon’s local advertising only serves to make this more effective, of course. The success that the Kindle w/ Special Offers as a program has enjoyed made it almost inevitable that the Kindle Fire would be included eventually and it seems that the time has come.
The Kindle Fire is Amazon’s best-selling product, as their first-quarter earnings release made clear. It shouldn’t take anybody by surprise, then, to find out that they intend to make sure advertising space on the device comes at a premium. According to Ad Age, that premium might be an even more expensive one than we could have predicted. Amazon is said to be looking for $600,000 to run an ad on the Kindle Fire’s Welcome Screen. For a variety of reasons, some of which are apparent, there has not been a great deal of enthusiasm for the idea among advertisers so far.
In addition to this being an impressively high charge for something like this, there was a great deal that was left unsaid. For one, nobody seems to be quite sure whether or not these ads would be served to the millions of Kindle Fire owners who have already bought their tablets. Having purchased a new product at full price with no indication that it would be used by Amazon to serve up advertisements, doing so would definitely upset some people and potentially undercut the benefits of buying the ad space. This isn’t exactly a situation where Amazon is incurring obvious costs on existing units, as the Kindle Fire lacks 3G access.
Also, the company seems to have failed to clearly define what they consider to be the “Welcome Screen”. Is this the Lock Screen, or something else? This could very well be a sign that Amazon is getting ready for the next Kindle Fire and the Welcome Screen is something that will be included specifically for the purpose of creating a space for ads. Unlike the Kindle eReaders, persistent advertisements would not be possible when the tablet is powered down which creates the need for a more creative solution to make the ads worth buying.
If subsidized by advertising, the next Kindle Fire model could be impressively inexpensive. Existing Kindle w/ Special Offers options are 30% cheaper than their counterparts. If the same sort of trend applies to the Kindle Fire, it could mean a $150 7″ Kindle Fire or better yet a $200 9.7″ option. Now they just need to clarify the details to attract some interest. It is probably a smart buy for many advertisers, but how can they be sure of that when so many things are left unsaid?
I’ve been giving some thought to the implications of the still fairly new Kindle w/Special Offers as far as directed marketing goes, especially in light of the increasingly common speculation about Kindle Tablet PCs. The fact that this made such a splash, both in terms of controversy and in its success, only serves to emphasize the importance of the concept they are dealing with. It seems like Amazon is in a good position to capture the attention of huge numbers of deal seekers, and that there is some reason to believe that this is exactly their intent in the near future.
We know that people get excited about a good deal, even when it is on something they don’t necessarily need. The site Groupon has become amazingly popular recently for providing exactly this sort of deal. You sign up, log in, grab the deal of the day in your area, and likely end up making a purchase that would otherwise either have never occurred to you or been dismissed as wasteful. They basically rely on the fact that they can localize the deals to the point where hundreds of communities have something interesting going on in their area at any given time. It isn’t exactly a new concept, but it can be powerful when properly executed.
Amazon is in a position to take a swing at something like this from multiple angles at once. The most obvious approach is through the newest Kindle. You have to have an Amazon account to use it in the first place. Amazon has, as a result, potentially detailed information about the purchasing habits of just about any of these customers and can use something along the lines of their recommendation system to personalize deals to individual tastes. This is on top of the more widely ranging deal options. Already we’ve seen things like the $20 Gift Card for $10, which you can’t really go wrong with but which also guarantees Amazon a sale that might not otherwise have taken place. They also made the acquisition of popular deal of the day site Woot.com last June that offers a framework for even more impulsive buying opportunities. All of this is in addition to the Gold Box Deals, sales, and otherwise plentiful discount opportunities to be found on any given day on the Amazon.com website itself. There’s a lot going on here.
If at all possible, I expect to see this concept extended to the upcoming Kindle Tablet as part of the most basic experience of using the site, whether it focuses on media, app sales, or simply referrals. The success of such an effort would be exactly the thing to allow Amazon to undercut the competition on purchase prices without putting themselves at a disadvantage. While I don’t expect it will be nearly this amazing, I doubt anybody would mind getting the occasional special offer screensaver on their Kindle Tablet if it means that they get iPad-like functionality for less than the cost of a Nook Color.
Amazon(NASDAQ:AMZN) has just announced the newest addition to its highly successful Kindle line… kinda! Visitors finding themselves at Amazon.com today will be seeing an announcement for a new “Kindle(with Special Offers)” being sold at a mere $114. While it isn’t a hardware upgrade, anything to bring down the price on the Kindle is only going to help get it out there at this point.
What we’ve got is essentially just the existing Kindle WiFi that we all know and love already. Instead of the standard “enjoyable” screen savers of author portraits and “kindle” related facts, it will display current advertisements and deals available to users. While there will also be a small ad box at the bottom of the home screen, it is fairly unobtrusive and will not at any time appear during the act of reading. Overall, definitely sounding like it’s worth the $25 savings so far. Current examples being highlighted by the pre-order site include “$10 for $20 Amazon.com Gift Card” and “$1 for an album in the Amazon MP3 Store (choose from over 1 million albums)”.
In order to make these ads less painful for people to swallow, and presumably more effective in reaching a target audience at the same time, Amazon will be opening up a service called AdMash. AdMash will allow Kindle users to preview potential Kindle advertisements and vote on which ones they would like to see. Those that make it through this user selection process will enter into the pool and have a chance to end up on your eReader. The plan at present is to allow users to select certain categories that they would be more or less interested in seeing on a daily basis and weighting the displayed ads based on these expressed personal preferences.
If all goes well, for example, a user will be able to decide they really love beaches and see a lot of ads displayed across beach backgrounds. While still theoretical at this point since nothing has gone live, I can’t really imagine that there will be any shortage of interested advertisers(depending on the pricing scheme of course, since this is a fairly unproven ad medium), so there should be room for variety. I would even imagine that at least some people, specifically thinking about coupon enthusiasts, will be more interested in the potential for sale notifications and coupons than the existing screen savers anyway.
The implementation remains to be seen, and I’m interested in seeing how a couple things are resolves. How does Amazon plan to guarantee that users access the Kindle’s WiFi often enough to keep the ads cycling, for example? Also, is this planned as an international project, or will the current US-only offer stand alone? Mostly, though, I’m curious how they will address the software issues, especially hacking. Anybody familiar with this site knows that you’ll find the occasional way to tweak your Kindle. This is something I think many of us take advantage from time to time. How, then, will the ads mesh with things like the popular Kindle Screensaver Hack that users developed to get around the repetitive author portraits? Also, assuming they have managed to find an effective way, will this mean a software update that will impair the user’s ability to play with these sorts of tweaks? Lots of questions without answers as of yet, but I’m sure it won’t be long before we know more.
As eBooks gain more popularity, it can’t really surprise anybody to see advertisers trying to cash in. Does this mean we can expect to start seeing ads in our Kindle books? There’s no real push that way yet, but it only makes sense, really. If offsetting some of the cost of a new book by putting up with a few pages of ads is possible, I doubt most people will mind.
Before anybody gets too up in arms, I should probably point out that this isn’t precisely a new and innovative concept. Off the top of my head, the earliest example of ads in books (and I’m not making any claim of this being the actual earliest example by any means) would be in Victorian serials, such as most of the Dickens releases. In more recent years, not much has changed. WOWIO, a popular eBook marketplace, has proven that it is possible to provide free books to interested consumers without taking sales revenue away from the authors by allowing advertisers to adopt specific titles and “wrap” them with ads at the front and back of the book.
The only question is what format the advertising is going to take. We’ve discovered over the years that the internet, traditionally a primarily textual medium however much that is changing in recent years, didn’t exactly encourage people to stick with your average magazine ad equivalent. Pop up ads, obnoxiously loud talking ads, animated gifs, flash animation, and more have all become pretty much a staple of internet browsing. Let’s be honest and say that there’s not much that could destroy the reading experience more effectively than these things manifesting in the middle of your book.
Overall, there’s a lot of potential here, both for great things and for unpleasantness. My impression is that a lot of the reason advertisers avoid books is that they sell in small numbers, compared to other forms of media consumption, and they last too long to be useful. What good does an ad do for somebody when it’s in a book I bought five years ago, right? Well, with devices like the Kindle, there is at least some potential for periodic advertising updates in books located on their servers, right? Sounds unpleasant, but it ends up being all about the implementation.
The only place where I’m really leery of what might happen is on the many Kindle apps, and possibly future hardware offerings, which are capable of displaying video and playing sounds. It’s neat to be able to play integrated video in your eBooks, but if that means that ads can be inserted that will take advantage of the same capabilities, it’s not worth it. For now, at least it’s nice to know that the Kindle device itself is safe, and that authors are given enough control over their works through Amazon, in general, that this will likely not be something that sneaks up on people if or when it does come around. When it does, who knows but that we might really appreciate the opportunity for some great new free or cheap eBooks in spite of the ads?