Another way to monetize a retail business website
More and more retailers are using the sale of digital advertising on their websites to complement their core business model. In this sense, those who have not yet done so are missing a great growth opportunity. I make this statement since, for example, in the US, advertising spaces on retailers' pages grew by 48% in June 2019, compared to 10% in other industries. What is striking is that the sale of advertising space on retail pages is the lowest of all industries including entertainment, news, games and sports.
Transform "traffic" into a new opportunity
It's no secret why retailers have been slow to sell ad space on their platforms. After all, your main goal is to have buyers in your stores while digital advertising tends to lead customers to other sites. In fact, many perceive online advertising on a retailer's website as a threat to their main source of business, requiring too large an investment, or simply not getting the investment back.
Either way, in many cases strategically placed ads in an online store can help improve the shopping experience and help retailers improve their bottom line. For example, retailers can promote products and offers through their website leading to more sales of their items. In the same way, you can promote those products or services that you do not offer. For example, a person looking for bathing suits during the winter season can benefit from an advertiser's discounts on air tickets to tropical destinations.
The doubt about offering spaces on a retailer's own sales platform is leaving “money on the table”, especially considering the amount of traffic that these types of businesses can have. With this in mind, I have identified three areas in which retailers can grow their own ad space sales business and thereby extract more value from their audiences, making the most of their traffic and opening up new revenue opportunities.
Allow machine learning or artificial intelligence to do the heavy lifting
According to Google, in the first quarter of 2019, US retailers blocked more ads from the platform's Display network than any other provider of ad space. This makes sense in a way if it is understood that these sites do not want to have their competitors' products appear on their web pages. Although blocking ads may seem strategic on paper, retailers may be missing out on huge revenue opportunities.
Machine learning technologies such as Google's allow you to identify revenue opportunities at scale by evaluating the performance of the ads offered by a retailer and comparing it to other similar sites. The advantage of this technology is that it can analyze areas of growth that the human eye could not. Some common examples of ad optimization recommendations include blocking similar industries, product price changes, adopting different types of offers, and improving page load times.
Use audience information to ensure the best distribution of advertisers
Retailers have vast information about their audiences that can be used in multiple ways. This information can be used to develop segments based on common user patterns. It also helps to connect buyers with relevant promotions through pages and applications at the exact moment, so that these people can generate a purchase. This helps retailers differentiate their ad space offering and ensure better conversions from their top advertisers and vendors.
In addition to this, during the first half of 2019 programmatic direct offers (automatic reservations of advertising space acquired through software) contributed only to 10% of US retailers' sales. However, this item has the opportunity to offer better direct offers since, unlike other ad portals, buyers are in physical premises when browsing a retailer's website.
Take advantage of new ad formats on a retailer's website
Some statistics say that the average user spends an hour per day watching videos through computers and mobile devices. However, the portion of ads in this format through Google's display network is 1%. This imbalance represents an excellent opportunity not only for retailers but for any advertiser.
A good way to take advantage of the video format is through the Google network using “Out-Stream” or video formats, since they can have better returns than the usual display image ads.
Retailers have many variables to consider when it comes to selling ad space on their websites as ads can distract from their core business model. However, opening these communication spaces can help to strengthen your relationship with suppliers or companies from which they sell their products. In any case, it is important to know that there is an alternative business model that, well managed, could generate great economic benefits for those who implement it.
