The sting of driving traffic to retailer .com sites through advertising via the Facebook and Google duopoly is expensive. The cost of shipping orders in the age of “free shipping” is even more expensive. So how else can retailers drive a higher revenue per visitor? Ads.
Each retailer knows the value of their traffic and understands the value of either selling the promotion of products on their site or linking out to other sites. Each retailer is taking one of two approaches: 1) self help advertising tools allowing any brand or seller to purchase keywords using budgets; 2) middle man large agencies providing limited access to keywords using budgets.
Amazon realized the value of ads early and built an extensive platform for brands to self administer their ads similar to Google. That business which is part of the “Other” category drove over $3b in revenue in Q4 2018.
Wayfair recently released their platform allowing brands and sellers to self administer their ads. Watch as the Wayfair narrative shifts from owned sales to services revenue (marketplace, advertising, etc.)
Whilst Amazon and Wayfair are focused on allowing anyone to gain access to spend on marketing, Walmart (who currently earning the most traffic of any retailer in the US) still sells the majority of their ads via large agencies such as Criteo. This is surprising as Walmart is focused on becoming more of a marketplace for small and medium size businesses yet is so restrictive on new accounts and access to marketing.
Traditional retailers that do not employ the marketplace model such Kohls, Target and Macys are even more guarded. These retailers ONLY allow marketing via large agencies and to those brands who sell them directly.
As this space continues to evolve, we will see more and more ads as brands realize there are very few sales earned via organic searches and retailers understand the value of captive customers and what a brand is willing to pay for a click.