Amazons recent Twitch purchase taken along with other recent moves from the company suggest it is eyeing creating a private market for delivering native ads on mobile to promote its products, media tie-ins and games to a highly engaged, passionate audience.
As the awareness and understanding around native advertising grows well as the volume of available impressions, companies are increasingly looking at acquiring mobile solutions with fast-growing usage numbers with the hope of monetizing them through in-feed advertising. Amazons acquisition of Twitch follows a logic similar to Googles deal for YouTube and Facebooks WhatsApp and Instagram buys.
Big acquisitions in tech are increasingly fuelled by native advertising, said Kunal Gupta, CEO of Polar Mobile.
Social networks and content producers are boasting huge user-bases and companies like Amazon are increasingly looking for ways to reach these audiences in a non-disruptive way, he said.
Native advertising is so important right now as it can represent a passive and palatable method of reaching target audiences without angering early adopters or driving away new users.
Amazon has shown a propensity for native purchasing within its own applications. The Fire TV and Tablets with X-Ray show Amazon has figured out a way to present its catalog to a passive audience of media viewers, per Mr. Gupta.
By pairing its technological expertise and vast catalog with a tech-savvy audience of early adopters such as those viewing Twitch, Amazon has acquired a ready-made audience for native ads.
Twitch is a video platform and community for gamers.
Native advertising is quickly gaining on mobile because of its perceived potential for addressing the challenges around monetizing media consumption on mobile devices, where screen real estate is at a minimum.
Early results have been promising, with native ads on smartphones and tablets often performing better than the same content on desktop, per Mr. Gupta.
Recent research from Polar Mobile reveals that 79 percent of publishers are implementing native advertising on mobile.
Additionally, overall click-through-rates are 50 percent higher on mobile compared to the same content on the desktop.
Not only does native advertising boast a higher click-through rate than traditional banner ads, but mobile homepage promotional native placements perform have an average CTR of 0.36 percent.
Other findings Polar include that native advertising placement on a tablet is clicked twice as much as the same exact placement on the desktop, even when the Web site is the same across both devices.
Time spent consuming sponsored content is 2 times longer on tablet devices than desktop and 2.5 times longer on smartphone devices than desktop, for the exact same content.
Time spent consuming sponsored content is 62 per cent higher when readers are brought to the article via referral traffic, be it by earned or paid promotion.
Far-reaching mobile strategy
Amazon continues to build a far-reaching mobile strategy.
The ecommerce giant made a big splash with the launch of its Fire smartphone earlier this year that features a tightly integrated shopping experience. However, early reports suggest sales for the device have been minimal.
This spring, Amazon addressed the need for better product-related content on mobile for its third-party sellers by introducing a new app and mobile product ads (see story). http://www.mobilecommercedaily.com/how-amazon-is-driving-sales-via-mobile-services-for-third-party-sellers
The company also recently launched its own mobile point-of-sale solution in an already crowded market.
While the Twitch deal does not immediately suggest a strong mobile angle, taken together with Amazons other moves, the case can be made, per Mr. Gupta.
At first glance this move might not scream mobile, but of late Amazon has been positioning itself as a maker of quality video games, purchasing major studios like Double Helix and developing their own Amazon Game Studios, Mr. Gupta said.
Paired with their focus on gaming with the Fire tablets and phone and Fire TV, and the tight integration between the two device sects, its clear Amazon sees the mobile and home-based media consumption as a seamless experience, he said.
Chantal Tode is senior editor on Mobile Marketer, New York
Senior Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at firstname.lastname@example.org.