Amazon Takes More Steps Toward Building A Mobile Ad Network With An API In Beta

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Amazon is taking the first steps toward building a mobile ad network across its Kindle devices with a new advertising API in beta for developers.

If you judge by the earnings of publicly traded mobile advertising companies like Millennial Media, which has had annual losses for the last five years, it’s a tough business with low margins.

But Amazon has something that most other competing networks don’t: troves of data on the millions of consumers who buy goods off its site.

That could help Amazon understand what kinds of ads actually result in purchases better than Google AdMob, Facebook or any of the independent networks like InMobi or Jumptap. It also means much more seamless calls-to-action embedded in ads that can get users immediately clicking through to buy products. Amazon is kicking off the network with advertisers like Duracell Powermat and Nature’s Bounty.

For now, Amazon’s mobile ads API will only work with U.S. users and apps and games on the Kindle Fire, Kindle Fire HD and other Android phones and tablets. If a developer does use the API, they have to make sure that their apps are also available for download on Amazon’s app store.

The network has two types of ads: static clickthrough banners and then banners that can expand to include rich media like video. They have calls to action that usually involve opening an in-app or native browser. There’s room for basic geo-targeting with using latitude and longitude coordinates if a user has chosen to share them with an app. Publishers can also blacklist certain advertisers they don’t want or think are appropriate for their users.

So far, Amazon has shied away from making a big purchase of an independent mobile ad network. That’s unlike Apple or Google, which bought Quattro and AdMob respectively back in 2010. While the AdMob deal is generally considered to have worked out well for Google, Apple’s effort to turn Quattro into a premium mobile ad network like iAd sputtered as brand advertisers balked at the upfront spending commitments the company initially asked for.

It seems that Amazon is taking a more conservative approach with more traditional ad formats and advertisers that already sell products on its site. The ads API comes on top of a host of other mobile app infrastructure products Amazon has built over the last year including a mobile gaming network, GameCircle, a virtual currency and in-app purchases.