Kobo is now displaying advertisements on most of their e-readers when they come out of sleep mode. A full page advert is now showing up that prompts users to subscribe to Kobo Plus and lets them know about the free 30 day trial. This ad shows up no matter if WIFI is turned on or turned off, since the image is being pulled from the device and not the internet. This is the first time that Kobo has ever displayed ads on their ebook readers.
The advertisements starting showing up when users installed the latest firmware update that came out at the end of July. The full page ads are being displayed on all of their modern e-readers such as the Nia, Clara HD, Sage, Libra 2, H2O and various older models. The ads are currently being displayed in customers in Canada, Australia, Belgium, Italy, Netherlands and Portugal. Hundreds of users have complained about this online, on various internet forums such as Mobileread and Reddit. Kobo customer service is unaware of this issue, since they have not been briefed and Kobo is not issuing refunds on hardware sales after 30 days.
Kobo has always made a big deal on their various marketing campaigns that unlike the Kindle, Kobo devices are ad-free, but apparently this is not the case anymore. Kobo has yet to update any of their help files, letting users know about the new advertising system. I wonder if Kobo will continue to advertise their own products or if this is just the first step to in a greater push into advertising. The company does offer some services that do not get much attention, like Super Points or Kobo Audiobooks. Will Kobo eventually offer a paid advertising service for indie authors who want to promote their ebooks? Will Kobo even go so far, as reach out to other big name brands and get them to advertise on their e-readers?
Amazon has acknowledged on many occasions that they do not make very much money on hardware sales. They make their money with digital audiobook and ebook sales, in addition to accessories. Amazon has been selling low-cost Kindles with Special Offers for almost a decade. Brands pay Amazon to display advertisements on the sleep screen and home screen. You can pay $25 to remove these ads through Amazons own portal, or you can call customer service and normally they remove them for free. If ads are not your thing, you can buy a Kindle for a little bit more, with no ads. Some markets such as Canada, do not allow Kindles with Special Offers to be sold, so all Kindles are ad-free by default.
Kobo is in a similar position to Amazon. The profit margins on e-readers is not very high, since the bulk of their sales come from retail distributors such as Best Buy, Walmart and other bookstores all over the world. Kobo makes more money selling audiobooks and ebooks, but when an e-reader is sold through a retail partner, they actually get a cut out of each digital purchase a customer makes. This gives retail partners a greater incentive to push the Kobo brand, since they make reoccurring revenue. Since retail partners get a cut, this means for every book sold, they actually make less than what Amazon, B&N, Google or Apple makes.
There is no denying that Kobo is now advertising on their e-readers, something they have never done before. If customers do not create an uproar or if there is little to no public backlash, there will be more advertising on Kobo devices in the future.
Michael Kozlowski has written about audiobooks and e-readers for the past twelve years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.