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Amazon Enters Ad Biz with Geico

26 Feb, 2014 By: Doug McPherson

SEATTLE – Amazon has now entered the advertising ring to compete with YouTube, Hulu, Yahoo, AOL and – to some extent – TV by including preroll ads ahead of its original series pilots, reports AdAge.

The first advertiser? Geico will be running banners on program landing pages and 15-second repurposed TV spots at the start of series along with placements on, the Kindle Fire “wake” screen and movie site

“The move combines two of advertisers’ biggest wishes – premium content and a measurable audience – on a service that venture capitalist Mark Suster once called ‘the biggest threat to YouTube,’” AdAge reports. 

Amazon says it’s been testing a button on long-form video ads where viewers can click for product information or to land on a product page.

On President’s Day, a Geico banner ran on Amazon’s home page. “The deal was structured so that it takes advantage of Amazon as a property,” said Jason Smith, digital media director at Geico’s media agency Horizon Media. He didn’t disclose the price tag.

Lisa Utzschneider, Amazon’s vice president of global ad sales, wouldn’t say if Geico’s preroll ads are themselves a pilot program for a bigger Amazon video play – such as a free ad-supported tier of Amazon’s streaming video service.

“Amazon’s goal is for video ads to create a more relevant experience for our customers while they’re shopping,” Utzschneider says. “At this early stage, it’s about testing and learning. We’re looking at all different video formats. We’re focused on creating a great experience for our customers.”

Amazon isn’t currently scheduled to present at this year’s Digital Content NewFronts, but is “working with a handful of advertisers” on video campaigns.

People who watched the first episodes of certain TV shows on Amazon’s Kindle Fire tablet were shown video ads. Not only did Amazon strike deals with TV networks to bring ads to their shows, it also negotiated control of ad sales. And earlier this month Amazon said it’s partnering with video ad-tech firm FreeWheel to slot pre-roll ads within videos on its product search results pages.

“That partnership [with FreeWheel] is getting us to one step closer to offer more video inventory to our advertisers,” Utzschneider told AdAge.

The Wall Street Journal reports Amazon is wooing J.Crew, Ralph Lauren, Lord & Taylor, Abercrombie & Fitch and Neiman Marcus, and Amazon would likely offer retailers use of their massive warehouses and logistics network, Fulfillment by Amazon, for a fee.

“For the retailers, an accord would represent something of a deal with the devil. Amazon, with data on nearly 240 million customers and a willingness to lose money on new initiatives, is widely feared as a competitor, even among merchants that sell goods on the site,” WSJ notes.

Amazon is also planning to launch a Web TV box powered by Google’s Android OS to take on its prime competitors, Apple and Roku. The Amazon TV box may double as a gaming console, as the company has been hiring game developers.

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