As ad blocking threatens the $60 billion digital advertising business, Amazon plans to lure consumers and counter mobile ad blockers with a discount phone subsidized with ads and data collection. According to L2, the etailer recently announced to subsidize Prime members’ Android phones with ‘special offer’ ads featured on the lock screens, replicating a model that has already seen some success on their kindle devices.
Unlike the Kindle, which only promotes in-house titles, these Android phones will push ads from a variety of traditional marketers. Users are required to install several Amazon apps on the phones, inflicting bloatware and drainage of battery and data plan. Additionally, Amazon will be collecting data around consumer interactions with the advertisements.
Subsidizing consumer electronics devices via advertising is an idea as old as the commercial internet that, to date, has born little fruit. Previous efforts – such as 90’s throw-back freepc.com – have typically attracted low value consumers, primarily motivated by price, who have a fairly low return to advertiser.
Given the under $200 price of a new Android phone, and the trend moving towards blocking ads, consumers attracted to this offering are likely to have a small amount of disposable income and are therefore of little value to marketers.
Worse yet, this ideas seems to be swimming against the key challenge of advertising on mobile; it has been well documented that excessive advertising can leave consumers with a hefty bill for data used on downloading ads. In the US alone, consumers who deploy ad blockers could be saving as much as $7.19 per month in excess data charges, or around $8.3 billion per year.
While Amazon may be able to drive adoption of this offer via the sheer bulk of its 70 million+ Prime user base, the idea remains a poor response to mobile’s advertising problem of bombarding consumers with poorly targeted offers that often negatively impact the user experience.
A version of this appeared in L2 on July 7. Read the full article here