Amazon’s Mobile Supply Drive Ultimately Rests On Demand

AmazonAppsAmazon’s not lifting its foot off the gas pedal in the drive for more developer ad dollars.

After revealing the Fire Phone only weeks ago, the ecommerce company tried to incent new app creation via a two-month promotion offering $6 CPMs on the Amazon Mobile Ad Network. The company is also making a European push, expanding support for Amazon Mobile Ad Network to Germany and France.

But despite these developer perks, some industry experts wonder if demand will match Amazon’s supply.

“Amazon’s CPM guarantee to mobile developers is [positive] but it needs to be followed up with a long-term strategy that continues to reward developers for their efforts and tied in to a strong user adoption pitch as well,” said Scott Hirsch, CEO of app development platform Appsbar. “They can temporarily buy market share from the pool of app developers and it’s not a bad idea, but ultimately it goes back to supply and demand.”

Amazon’s CPM pitch is a step in the right direction to entice iOS and Google Play developers, he pointed out, but there needs to be a wide enough user base across Kindle devices and Fire Phones to retain them.

“I really hope Amazon recognizes there is a big opportunity for innovation and disruption in the mobile developer business model,” said Dave Cotter, cofounder and CEO of iOS and Android app SquareHub, and a former GM at Amazon. “If Amazon starts demonstrating a broad footprint and more importantly, sees developers have success at scale with these ad units, then I think they’re certainly in the game.”

Amazon’s promotion only applies to new apps, which essentially apply to ads that run as full-screen interstitial formats alongside “in-app” actions such as a swipe at a natural transition at a new game level. Developers will determine the success of Amazon’s offer based on whether it boosts their app discoverability and drives downloads and revenues to offset development costs.

Cotter remains hopeful.

“They have a much different perspective on their app store than iOS or Google Play,” he said. “The idea of helping developers drive people to their products through more traditional marketing [metrics such as] CPMs and CPAs is actually pretty novel and fresh. It’s an area where Amazon, because of their retail footprint and their number of customers, can easily siphon from their retail sites into their app store, if they decide to do that.”

Collectively between the iOS and Google Play app stores, there are more than 2 million applications compared to Amazon’s 240,000. While iOS and Google Play rely on mobile engagement metrics such as number of downloads, repeat sessions and upgrades, Amazon’s ecommerce data could feasibly add a rich layer of product, purchase or in-app payment insights.

What Cotter and other developers are looking for now is greater scale across the board.

“Will those successes multiply into hundreds of thousands of developers reaping benefits [with a] self-service kind of program that runs on its own so they can scale and develop?” he said. “That’s what I think we’re still waiting to see and the necessary piece was really the Fire Phone because it will attract a whole new set of developers beyond just Kindle Fire developers.”


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