This year’s highlight for online retailers at the d3con, a conference dedicated to Display Marketing in Hamburg, was without any doubt the panel discussion „Distributors becoming publishers and marketers“.
Marketers from Amazon, Zalando, eBay and others discussed a question that is as simple as compelling: how can online retailers monetise their website traffic beyond sales?
Retailers to Offer their First Party Data as Second-Party Data
Retailers own a wealth of first party CRM data about their customers – among these product research- and buying histories. This data can be used to target audiences in Display – for branding or retargeting purposes.
Whereas in 2011 it was cheaper for advertisers to target their campaigns broadly than to buy audience data, advertisers also increasingly try to minimise wastage and make advertising more relevant to visitors.
Amazon offers advertisers access to a customised Demand Side Platform (DSP) offering exciting targeting options. Imagine a car manufacturer who knows what furniture brands its customer base typically prefers. By using Amazon’s DSP, the car manufacturer can target audiences that ordered furniture from exactly these brands. Zalando Media Solutions has followed a similar path with the acquisition of the audience platform nugg.ad to expose specialised audiences to other advertisers.
Unfortunately, for most publishers, the currently available Supply Side Platforms (SSP) are still too limited and can’t provide advanced audience data for their inventory.
When visitors perform a product search on a retailer’s site, that is usually a marker of an intent to purchase: “I am currently looking for product X”. German based company Kupon allows retailers to sell exactly that search data – enabling a pool of competing advertisers to show relevant ads for product x to exactly that visitor.
A passionately discussed question is, whether retailers cannibalise their own business by selling this data. By allowing competitors to target their own visitors, they may lose valuable conversions to them and instead only earn a fraction of the revenue they would have gained from these visitors before.
The answers to that perceived threat could not be more different. While platforms like Kupon follow a protectionist approach that allow retailers to blacklist a selection of competitors, bigger players like Amazon and Zalando think the advertising process from the user’s point of view: How can we give users a great experience? The rationale is simple: in a market with increased price transparency, advertising income can become more and more valuable. Retailers may use it to subsidise other (digital) products (the Google model)- or use it to sell their goods at lower prices.