Why retailers are gaining an edge in online advertising

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All eyes are on Amazon’s purchase of bankrupt Sizmek’s ad-serving technology, signaling yet another major move by the ecommerce titan to challenge Google’s dominance in the online ad space. But Amazon’s move to up its ad-serving game is more than a power play by an individual e-commerce giant. Rather, it’s the most visible manifestation of a larger sea change within the industry, as commerce platforms position themselves to supplant online publishers in the ad game.

The passing of the torch from publishers to commerce players has been in motion for a while now, but the shift has kicked into high gear recently. We’ve seen the announcements: Walmart is acquiring ad tech in an effort to scale up its online ad business and target customers both online and offline. Target is repositioning its media network and possible acquiring Triad from WPP. Kroger is doubling down on advertising via new formats and improved customer experience.

These commerce powerhouses represent the new breed of “publishers” that could quickly rise to surpass today’s publishers both in advertising importance and in their share of the overall ad revenue pie. This includes not just ecommerce players, but also less-conspicuous players like Starbucks, Uber, and all others that boast both scale and an impressive first-party data business. If this sounds  familiar, that’s because it’s nothing new. Commerce companies are emerging as the latest in a long line of non-publishers that have shifted ad dollars away from traditional publishers.

The Rise of Commerce Advertising 

Commerce companies’ advantages over today’s online publishers look very similar to those of Facebook and other social platforms: They have scale, they own consumer identity, and they have massive piles of bespoke high-intent purchase data—but they also get this data through a clear value exchange enabling them to drive opt-ins. This is an important difference to social platforms—the ability to offer a product or a discount in exchange for data enables commerce to explicitly align to the coming regulatory changes for privacy.
 
Read more at DigitalCommerce360

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