As ad blocking threatens the $60 billion digital advertising business, Amazon has a plan to lure consumers to a discount phone subsidized with ads and data collection. The e-tailer recently announced a plan 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.
But 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, which inflicts bloatware and further burns through batteries and data plans. Additionally, Amazon will be collecting data around consumer interactions with the ad.
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, primary motivated by price, who have a fairly low value 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 tide of the of a 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 USA 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 well be able to drive adoption of this offer via it the sheer bulk of its 70 million+ primer user base, the idea remains a poor response to mobile’s advertising problem of over messaging consumers with poorly targeted offers that often impact the user experience.