Amazon usually doesn’t talk much about its ad business, it doesn’t break down revenues from advertising in its fiscal quarterly earnings reports. Even if the company talks about the business at various industry events, those presentations normally don’t offer much insight into the business. According to estimates by market research firms, Amazon’s ad revenue may have topped $800 million last year, which translates into roughly one percent of its total revenue. Straying from its usual line, the company today offered some details about its ads business, particularly video ads.
Amazon has announced that it has signed a deal with FreeWheel, a major video ad company, to provide the foundation on which Amazon is going to expand its video ads business. FreeWheel has basically been tasked with displaying the right ads to the right users, and this is likely to result in an increase in the frequency of ads displayed on Amazon video content. At first FreeWheel started out by serving short videogame trailers as ads in Amazon search results, both companies started working together in the fourth quarter. The ad company will also work on serving ads in select TV show episodes on the Kindle Fire, latest models of this tablet let users stream first episodes of a wide variety of TV shows for free due to a deal Amazon made with television networks. Could this give rise to a model where several episodes are available for free streaming in exchange for video advertisements? Amazon won’t say for sure, but its ad boss Lisa Utzschneider tells re/code that its advertising partners are interested in working with the company to make customer experience relevant with video.
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