Amazon’s bid to beat Facebook, Google in ad battle

As the battle for mobile advertising revenue heats up, Amazon plans to take on Facebook and Google by enabling developers to advertise their apps on its devices.

Developers making apps for Amazon's Appstore can sign up to the new advertising platform and see their apps featured on the company's tablet – the Fire – and other Amazon mobile devices.

The move has more potential for app developers than might be obvious at first (Amazon's slice of the tablet and smartphone market is tiny). The ads will also run on any Amazon-affiliated apps – such as its shopping app -- on Android devices, giving developers a potentially massive audience.

Amazon Fire smartphone
Justin Solomon | CNBC
Amazon Fire smartphone

The launch of the service marks an attempt by Amazon to gain a stronger foothold in the booming mobile ad space.

The e-commerce giant has been struggling in the mobile ad market and has just a 0.3 percent share of the total $68.59 billion of revenues, according to eMarketer. This is way behind Google's 35.4 percent share and Facebook's 16 percent. (Tweet this)

But Amazon has one advantage over its rivals – people spend more money in its app store than in its rivals'. Of all the mobile gamers that use the Amazon Appstore, 64 percent spend money on mobile games versus 37 percent for Google Play, according to market research firm Newzoo.

This could be key for app makers looking to advertise on Amazon's platform in the hope of increasing their revenues and downloads.

Amazon has tried to make its app advertising platform as easy as possible. The company will create the ads for a developer, all the user has to do is set a budget, with a minimum of $100, and select the duration of the ad campaign. When a user clicks the ad, it will take them to the install page for the app on either the Amazon Appstore or Google Play.

Developers can also chose an option to target a certain type of user.

Amazon is hoping the potential appeal of its advertising drive will bring more developers on board to make apps for the Amazon Appstore and help it compete better in this category against Apple and Google. Other efforts to boost its mobile appeal include offering users of its app store different paid apps for free each day.