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BizReport : Advertising archives : June 08, 2011

E-readers - the next ad frontier

The success of Amazon's ad-supported Kindle model, along with the forecast huge rise in Americans owning an e-reader device this year, signal the opening of the next digital ad frontier.

by Helen Leggatt

More than 20 million e-readers will be purchased in the U.S. by the end of this year, a rise of 60%, predicts eMarketer, giving the devices almost 9% penetration among U.S. adults. That figure is set to continue to rise and, by next year, 12% will own one.

eMarketer senior analyst Paul Verna says two recent developments serve to illustrate the broadening reach of e-readers.

"Amazon's announcement that its ad-supported, lowest-priced Kindle is now its best-seller supports the view that people are eager for affordable, no-frills devices," he said.

"At the same time, Liberty Media's $1 billion offer for Barnes & Noble was predicated largely on the retailer's success with the NOOK Color, whose list price is nearly double that of the ad-supported Kindle. Healthy sales at both ends of the e-reader price spectrum bode well for continued adoption of this device category."

The fact that Amazon's best-selling e-reader is ad-supported is encouraging news for marketers looking for new audiences and new ways to reach them. But surely consumers want some digital space without ads encroaching on them?

Apparently not, as long the ad placements are discreet and don't interfere with the reading experience.

In fact, many who were horrified at the thought of ads appearing in their reading material have been pleasantly surprised by how well Kindle have integrated advertising into the lower-priced Kindle with Special Offers model.

"I've been playing around with the $114 Kindle with Special Offers for a few days and much to my own personal horror, the ads didn't bother me at all," said Cnet editor David Carnoy.

"In fact, I thought they sort of livened up the home screen a bit, which is sort of blah to look at anyway. (It's just a list of titles and not a fancy virtual bookshelf or anything.)"

Tags: ad-supported, advertising, Amazon, digital publishing, e-books, e-reader, eMarketer, Kindle, tablet

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