Brands look to the Kindle

28 April 2011

SEATTLE: Amazon, the online retailer, has launched the latest version of its Kindle ebook reader, via which advertisers like Visa, Buick and JPMorgan Chase are seeking to reach consumers.

Speaking on a conference call, Thomas Szkutak, Amazon's chief financial officer, revealed it supported the Kindle with higher "broadscale advertising" spend during the last quarter.

Such a strategy has become vital in an increasingly competitive market, which now at least partly comes up against tablets like Apple's iPad.

"We've seen tremendous growth both from a device standpoint, as well as a unit standpoint in terms of digital books in the US," said Szkutak. "We see that customers are buying a lot more books."

He added: "We love the potential that it has long term and we continue to invest in that business."

The most recent iteration of this gadget, the Kindle with Special Offers, will deploy ads containing links to promotions instead of screensavers.

Priced at $114, the newest variant of the ebook reader costs $25 less than the existing cheapest option, that boasts a basic Wi-Fi connection.

Originally scheduled to be introduced on May 3, Amazon started shipping this device, to be made available through its own website, Best Buy and Target, on April 27.

"The team did a nice job of moving the dates up from several days from now," said Szkutak. "[We are] very pleased to be able to offer that and excited about that offering."

Consumers can access a full list of deals at any time, and may also choose their favourite ads, the best of which will be displayed on screens, using the dedicated AdMash application.

Financial services giant JPMorgan Chase is a launch partner for the Kindle with Special Offers, and expects to gain key insights as a result.

"It's a learning opportunity," Chris Conrad, JPMorgan Chase's marketing director for the Amazon Rewards card. "We will be just more rapidly able to understand what messages resonate."

Should the advertiser-funded model be extended into Kindle apps for smartphones and tablets, this could add to its appeal.

"As those platforms evolve we would look to be involved," Conrad argued. "We would take a serious look at any opportunity for advertising."

Credit card group Visa is also an early adopter, and Paul Wilke, the firm's senior business leader, global corporate relations, outlined its perceived benefits.

"It gives us an additional avenue to provide our cardholders with additional offers and promotions, which is why we got involved with Amazon for this," he said.

"More people are going online and downloading digital content, and more people are using products like Kindle to get ebooks and other digital content, so we want to reach people through this channel."

Olay, Procter & Gamble's beauty range, and auto marque Buick, part of General Motors, have similarly signed up.

Craig Bierley, Buick's director of advertising and promotions, expressed optimism regarding its prospects.

"The opportunity to offer custom-designed Kindle screensavers was a natural fit for Buick because Kindle is such a unique device surrounded by a community of intelligent, passionate people," he said.

"The Kindle for many people is really a centerpiece of their entertainment, so their level of engagement with the device, and hopefully with the advertisers on it, will be higher."

For Amazon, enhancing its advertising capabilities - be it on the Kindle, or third-party sites - presents equal advantages.

"In terms of our advertising business, it's still very early," Szkutak said. "We'll have to wait and see what we do further."

He added: "We think it allows us over time to have another way to have great low prices for customers."

Data sourced from Seeking Alpha, American Banker, Mobile Marketer, New York Times; additional content by Warc staff