Apple's biggest competitor in the mobile-ad space is turning out to be Amazon, with its fast-growing Kindle device and a burgeoning mobile-ad offering.
The Seattle-based e-commerce giant is already selling ads on its apps and websites, but recent moves point to much bigger mobile plans. It has hired Jamie Wells from Microsoft, where he led global product marketing for mobile display and apps. And he, in turn, is building his team -- his LinkedIn page proclaims: "Hiring for Mult[iple] Ad Sales Marketing Positions."
Meanwhile, Amazon has kicked the tires on a few mobile-ad companies, including mobile-ad network Jumptap, according to two people familiar with the talks. Amazon and Jumptap declined to comment.
That kind of move would mimic how Apple entered the mobile-ad space -- by acquisition. Two years ago, it snapped up mobile-ad network Quattro Wireless and launched a mobile-ad format called iAd.
Amazon also owns massive mobile traffic. About half of all U.S. adult smartphone subscribers visited Amazon sites and apps in March, according to ComScore. That makes Amazon the fourth-most-visited property on smartphones.
And like Apple with its iPad, Amazon sells its own tablet. It sold about 5.5 million tablets since the Kindle Fire made its debut during the holiday quarter, according to research firm IDC. (In a uniquely mobile phenomenon, hardware manufacturers often turn into ad sellers -- the world's biggest handset maker, Samsung, for example, will launch in the second half of 2012 its own mobile-ad exchange, AdHub Market.)
But perhaps most intriguing, Amazon generates reams of purchase data. The e-commerce giant already uses online-shopping data to power its own product recommendations and it would be hard for marketers to ignore Amazon if it incorporated some of that purchase behavior into mobile-ad targeting.
That kind of data was a draw when Apple launched iAd two years ago. Brands salivated over ad targeting based on actual purchase behavior, which was available thanks to iTunes' 225 million accounts and $5.4 billion worth of music, video, app and book sales in 2011.
By comparison, last year Amazon sold $48.1 billion in services and products, from books to TVs and diapers.
"With the amount of data Amazon has available, there's a massive opportunity to use that as a pretty powerful targeting technique online and into mobile," said Sal Candela, mobile director of media agency PHD.
Today, Amazon is selling special-offer ads on its Kindle e-readers, on the Amazon and IMDb mobile websites and on apps that run on a range of mobile devices, including its Fire tablet. Since so many consumers keep their credit cards on file with Amazon, many ads click through to one-step purchasing. On the Fire, Amazon is already pitching home-screen ads in packages that cost as much as $1 million.
Amazon's entry into mobile advertising won't be without its challenges. Given its effect on brick-and-mortar retailers and their online outposts, Amazon is not likely to see much of the $15.6 billion the retail industry spent in U.S. measured media in 2010 -- and retail is a key mobile-ad category.
But that 's a challenge it already faces as it sells display ads on its web properties, which attracted 101 million U.S. users and one-quarter of the world's internet population in April, according to ComScore. Ad Age reported in March that Amazon is making moves to let its advertisers reach Amazon customers off Amazon.com by buying up ad inventory on other sites these users visit and reselling it for a premium.
If there's an upside for mobile-ad competitors to Amazon's encroachment, it's that another tech giant entering the market will bring some much-needed attention to the space, which is expected to rake in $2.6 billion in U.S. spending this year.
If "Amazon gets into [mobile ads] wholeheartedly, the tide will raise all ships," said Phuc Truong, managing director of mobile agency Mobext.