Retailers Are Creating Media Properties That Will Revolutionize Marketing

Amazon and Best Buy Lead the Way In Advertising to Their Own Customers

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Jay                          Habegger
Jay Habegger

Online retail, by its very definition, exists so that companies can sell products and turn a profit on those sales. The model has grown steadily over the past decade as consumers become increasingly comfortable purchasing goods online. But savvier online retailers aren't merely consumer-facing stores anymore; they're evolving into media companies that can sell advertising and profit off their audience. In the process, they are creating a myriad of new digital co-operative marketing opportunities for themselves and their suppliers.

Retailers become media companies
On-site ad sales remain the most common way for retailers to dabble with transforming assets into paid media opportunities for suppliers. Similar to their use of retail signage or TV display ads at their brick-and-mortar locations, online retailers are transforming online real estate into digital media opportunities. Suppliers and third-party advertisers can purchase ad placements on the retailer's homepage, or within specific product category pages. On-site ad inventory gives advertisers the opportunity to push their message in front of online consumers as they are close to making purchase decisions. What better time for a product manufacturer to target a consumer than when they are already on the retail site? It's a great opportunity for the advertiser, and can boost the retailer's revenue.

The next evolution of digital co-marketing is an upgrade of re-targeting. Retailers have historically used retargeting to boost sales by driving traffic back to their websites, and it's a very effective tool for doing so. They place a cookie within a consumer's browser, and when that consumer leaves the site, the retailer pays for "retargeting" impressions on other sites with the goal of getting the consumer to return and complete the sale. Acting as a media company, the retailer now has the opportunity to sell that cookie and the associated audience data to its suppliers. Thus, it can still generate sales and conversions from retargeting programs, but now it can also transfer the media and creative costs. This approach reduces the retailer's digital advertising expenditure and creates a new revenue stream.

Influencing sales
These retailer-supported ad opportunities also benefit manufacturer advertisers. The ad techniques provide suppliers with a better targeting option that 's comparable to today's popular ROI strategies — e.g., search or standard retargeting — and much more effective than standard behavioral targeting. Retargeting based on browsing data from retail sites helps manufacturers find consumers who are further down the purchase funnel, and enables them to directly influence sales within their online channel partners. Which type of impression do you think an advertiser would rather purchase: a generic "in-market TV buyer" via a popular data exchange, or an impression from a major retail partner for a consumer who just visited its TV section?

Watching Amazon, Best Buy
Amazon recently announced that it would sell media impressions across the web, via a DSP, powered by its own customer-browsing data. BestBuy's online cookie program segments its 30 million online shoppers into consumer categories — categories that can be addressed with display ads across large publisher partner sites. As more retailers explore the potential of selling media, their interest will revolutionize co-operative marketing. Whether it's on-site advertisements for co-marketing partners, or the sale of retargeting inventory through a retail audience network, the ad is reaching a consumer who is actively looking to purchase in a supplier's retail channel. As more retailers focus on building audience networks, they will open the door to a powerful advertising tool unmatched by anything else online.

Jay Habeggeris the CEO of OwnerIQ.
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