updated 12:43 pm EDT, Fri May 18, 2012
Source claims Amazon in talks with ad agencies to bring lower cost Kindle tablet
Amazon is engaged in talks with a number of advertising agencies in the hopes of getting them to sign on in backing an ad-supported version of the retailer's Kindle Fire tablet, a source familiar with the discussions has told AdAge. If implemented, the ad-supported model could push prices even lower for Amazon's already budget-priced tablet.
Ad executives familiar with the negotiations claim Amazon approached multiple agencies, offering tiered deals. For $600,000, advertisers would have content displayed on the welcome screen for the Kindle Fire. For $1 million, advertisers would get the welcome screen placement, as well as increased ad inventory and inclusion in Amazon's public-relations push.
The cited sources note, though, that Amazon made no guarantees as to how many devices the ads would display on, drawing into question whether the advertisers would be given placement on those Kindle Fires already sold or whether the ads would only run on a future, ad-supported model.
For the advertisers, placement on Kindles already in the hands of consumers would be a more attractive option than a spot on a forthcoming device; but that might prove an unattractive option to Amazon, as the addition of ads could have a negative impact on consumer experience for Kindle Fire owners.
Amazon already has an ad-supported version of its Kindle e-reader, and that lower-priced model received a warm reception from customers. It is unknown whether the same model could work for the Kindle Fire, which debuted to high sales last year, only to see those sales drop off in the next quarter.