We got an interesting read this week on Amazon’s Kindle ereader sales. This is particularly significant to marketers since Amazon has brought to millions an ereader bundled with “special offers” and screensaver advertisements.
Amazon followed its usual tact and did not reveal the precise number of Kindles it sold in the quarter. Instead, it only noted that Kindle sales in Q2 showed an increase over Q1 sales. The figures are vague –as we have come to expect from Amazon. Meanwhile, AP reports that Q2 was also a good quarter for sales of eBooks for the Kindle device.
Specifically, Amazon said it has sold more eBooks (that it offers for the Kindle) than hardcover and paperback books.
Even more noteworthy: Amazon CEO Jeff Bezos reported that the $139 Kindle 3G with Special Offers — a version of the Kindle Amazon released in Q2 that is subsidized with ads — is now its top-selling Kindle device. By way of background, Kindle with Special Offers carries a slightly lower price tag ($25 less or $114) because it is effectively ad-funded. Special offers and sponsored screensavers display on the Kindle screensaver and on the bottom of the home screen. However, they don’t interrupt reading.
What are these so-called offers? Over the last months the promotions and deals displayed have included:
-- $10 for $20 Amazon.com Gift Card
-- Save up to $500 off Amazon’s prices on select HDTVs
-- $1 for a Kindle book, choose from thousands of books
-- Spend $10 on Kindle books and get a free $10 Amazon.com Gift Card
As for screensavers, Amazon says its goal is to show sponsored screensavers that Kindle owners want to see. To this end, they have created a free Kindle app (available now) and website (coming soon) called Amazon AdMash. Anyone with a Kindle (Latest Generation device) can download AdMash, a clever app that harnesses the best of crowdsourcing to let people have a say in their future screensavers. How does this work? Basically, AdMash will show you two different screensavers, and then ask you to vote for the one you like best. The community will decide. Smart.
Amazon’s Q2 numbers leave key questions unanswered about the ad-funded device. Is the price of this package bringing in new customers? If so, what are the demographics? Are they new too? (I know my mother-in-law – who is 82 – is a huge fan of Kindle, in part because it is a breeze to read.) And then there is the term ‘Special Offers.’ So far, we know the “offers” aren’t a consumer turnoff. This could be because Amazon shrewdly and purposely made the decision not to use the word “advertising” to describe them. So, who can refuse such an offer?
As I’ve written in columns on MobileGroove and elsewhere, people will accept advertising in exchange for offers they appreciate. In fact this view is confirmed by a several industry reports, including a recent one from the Yankee Group. It shows that more than 70 percent of mobile subscribers surveyed in the U.S. want offers on their devices. As marketers, we can’t ignore the Kindle. We need to add this device into our marketing plan discussions. Amazon is most certainly providing advertisers more detailed user information to make sure they can make their media buy as targeted — and effective — as it can be.
Meantime, let’s not forget that Amazon has another card to play later this year when it is expected to launch a tablet device. That’s when things will get even more interesting.