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How Digital Channels Performed During The Holiday Rush

DigitalSalesDriveBlack Friday came and went and while the results were mixed (The National Retail Federation (NRF) estimated an 11% drop in combined online and in-store retail sales), digital seems to be the bright spot.

ComScore, for instance, found $26.7 billion was spent online in the month of November, a 16% increase from last year while Adobe's Digital Index clocked Cyber Monday online sales totals at $2.65 billion. Cantor Fitzgerald Equity Research noted that the digital components of omnichannel retailers like Walmart, Target and Best Buy performed well, with year-over-year growth of 54.4%, citing Channel Advisor percentages.

Here’s how the first mega-spending weekend played out for digital advertisers.

Display Okay

With yet another truncated holiday shopping season (there are only 28 days that fall between Thanksgiving and Christmas this year, as opposed to 33 in 2012), marketers upped the ante on bidding strategies.

According to Andrew Casale, VP of strategy at Casale Media, the real winner this Black Friday weekend was bidding that took place on Cyber Monday, coming in at “15% more overall demand/spend than we observed from already elevated Black Friday figures.”

Bids per impression were 42.9% higher than the Q3 average this Black Friday, and the average clear price was 33.3% higher than the Q3 average.

Retail spent the most and Casale said Target, Gap, Best Buy and Walmart were the top spending brands during the initial holiday spending period.

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Google Shopping Ads Explode, Igniting Interest From Retailers (Including Amazon)

PLAYou’ve come a long way, baby.

Product listing ads (PLA), which some consider the crown jewel in Google’s commerce crown, didn’t cost a thing in 2012. Today the paid search product, now referred to as Google Shopping Ads, may be bringing in as much as $8 billion for Google, according to Evercore Partners estimates.

Based on data from Merkle-owned search marketing agency RKG, which saw 70% year-over-year growth in client Google Shopping Ad investments, along with IAB and PricewaterhouseCoopers figures showing retail’s percentage of overall online ad spend, Evercore figured Google Shopping Ads constitute 14% of Google ad spend this year.

Although these estimates served as a proxy for overall Google Shopping Ad growth, the results show that the format is definitely gaining traction.

At RKG alone, Google Shopping Ads drove 50% of non-brand search clicks, up from 35% last year. Adobe Q3 Digital Index data similarly indicated Google Shopping Ads outperformed other search-engine marketing spend, with 34.8% growth year-over-year.

Google began migrating merchants from PLA campaigns to Google Shopping Campaigns in April, and rolled out a number of new features – data-management capabilities that let advertisers categorize based on item ID, price, or merchant name.

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Twitter Loves #Commerce, Launches Card-Linked Offers

TwitterOffersFollowing on the heels of its buy button announcement and its recent CardSpring acquisition, Twitter announced the introduction of what it’s calling Twitter Offers – another step by the social network to add more commerce functionality to its offering.

Twitter bought CardSpring back in July. The platform enables the creation of payment applications, a clear complement to Twitter’s commerce aspirations.

Advertisers will now have the ability to create card-linked promotions that they can share directly with Twitter users, who will be able to link their credit or debit cards to offers that appears in their timelines. Twitter will then keep a user’s credit or debit info on file for future transactions on Twitter.

Combined with the buy button, which allows users to transact directly from a tweet, and Twitter's lead gen card product, Twitter Offers will ostensibly make ads on Twitter more actionable and self-contained within the Twitter universe – a play that could be in part an effort to help increase Twitter’s sagging user growth numbers, as well as a move to endear itself to brands.

As Twitter CFO Anthony Noto (the same Noto who misfired a tweet today, seemingly leaking information about a potential upcoming acquisition) observed during the company’s Q3 2014 earnings call: “We continue to drive nice growth and spend per advertiser as we improve the ROI we provide for them and offer new advertising products.”

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Alibaba Helped By Revenue From Display Ads And Mobile

AlibabaEarnings

E-commerce giant Alibaba – often referred to as the Amazon of China – had a rosy third quarter, its first as a public company after a whopping $25 billion IPO (the one that put about $6 billion in stakeholder Yahoo’s pocket). (Earnings release.)

Alibaba’s Q3 revenue growth was “mainly driven by the growth in online marketing service revenue and commission revenue,” which includes both performance display on the merchant side and transaction commissions, according to the company. Alibaba’s origins as a B2B marketplace position it quite differently from its American nemesis Amazon.

Via online properties Taobao and Tmall.com, Alibaba offers targeting both on- and offsite in the form of e-commerce search and display ads. Alibaba also enables real-time bidding on- and off-network through its Taobao Ad Network and Exchange (TANX).

Posting an overall 53.7% increase in revenue to $2.7 billion on Tuesday, Alibaba similarly saw strong traction in mobile, where it pulled in $606 million, which accounted for 35.8% of the company’s gross merchandise volume (GMV). At the close of the third quarter, Alibaba counted 217 million monthly active users, up 15.4% from the 188 million recorded last quarter.

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Inside Walmart’s Ecommerce Marketing Engine

BrianMonahanWalmart, one of the last bastions of big box retail, is investing for a digital future – one with considerably less square footage.

Walmart recently revealed plans to invest between $1.2 to $1.5 billion in its ecommerce and digital operations for fiscal year 2016. Subsequently, its in-store investments are taking a temporary hit. In its capital expenditure plans, Walmart notes a “moderation of large format store growth" in order to test pharmacy-and-convenience-store models of Neighborhood Markets.

While Walmart expects its global ecommerce sales to grow 25% by 2016 – there’s still an elephant in the room: Amazon. But Walmart’s online sales growth rate recently surpassed Amazon’s for the first time in 10 years.

Walmart’s $466 billion retail engine includes a collection of tech developed (or acquired) through the @WalmartLabs accelerator whose capabilities include search optimization, predictive analytics and product recommendations.

According to Brian Monahan, VP of marketing for Walmart.com, a team of 100 @WalmartLabs engineers supports the store’s internal marketing efforts.

Walmart’s relationships with the world’s largest brands and manufacturers – its suppliers – also spurred the development of digital media buying and optimization platform Walmart Exchange (WMX).

Monahan, who joined the retailer roughly a year and half ago after spending 20 years working in agencies, spoke with AdExchanger about Walmart’s digital growth spurt, WMX and the future of shopper media.

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Amazon’s Ads Boss On Scaling Custom Off-Site ‘Experiences,’ Ecommerce Ad Relevancy

AmazonAt the outset of Advertising Week in New York City, WPP chief Sir Martin Sorrell turned his attention to Amazon’s VP of global ad sales Lisa Utzschneider on the stage they shared with Live Nation, CBSi and ESPN.

“Your job, I guess, is to demonstrate the value of Amazon’s data for off-platform advertising,” he quipped. “Your revenues are, what? $700 million? A billion?" Where, he implored, does "visa" come from?

Though at times he grilled Utzschneider over profit pressures like something of a Wall Street flack, what he seemingly itched for was a discussion of data – the kind that comes with 250 million member accounts and a plethora of product searches.

He called Amazon’s extensive data and off-network opportunity “the elephant in the room.” Would Amazon, he wondered, seek to rival Google’s $50 billion ad business with its own intent-rich platform?

“I can’t comment on that,” Utzschneider said.

“Yes, but these are the issues debated amongst the agency and client community,” Sorrell said. “Google’s market position is something we all think about…what Amazon has done in the last six months [could provide] a number of alternatives. “

He went on: “You have the strongest source of data, like we’ve seen with Tesco and Dunnhumby and Kroger…you have the opportunity to drive that.”

“The only thing I will add is there is plenty of third party data out there that shows consumers begin their search for products on Amazon,” Utzschneider acknowledged.

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Rakuten: The Commerce Data Conglomerate

TonyZitoRakuten Marketing, the online marketing subsidiary of Japanese ecommerce giant Rakuten, renamed its business units on Tuesday to signify its omnichannel aspirations.

Rakuten Marketing is part of a hybrid clique of companies scurrying to unite digital marketing and commerce data services – competitors like eBay, IBM and the newly public Alibaba – round out the pack.

Rakuten rebranded the affiliate marketing service LinkShare, which it acquired in 2005 for $425 million, into the “Rakuten Affiliate Network” on Tuesday. Rakuten’s product data feed platform, PopShops, will be sold as a core offering within Rakuten Affiliate Network.

The display and retargeting solution from its 2012 purchase of mediaFORGE will become “Rakuten Display.” Rakuten’s most recent acquisition of multitouch attribution vendor DC Storm will become “Rakuten Attribution.” And Rakuten Search will serve as the group’s full-service, paid search agency.

“There was a lot of synergy between channels,” said Tony Zito, president of Rakuten Marketing, of the LinkShare and mediaFORGE businesses, which generally have 30% overlap in client retargeting and affiliate campaigns. “Where we found there was overlap, we found performance improved incrementally … so that was a key moment for us and what spawned the idea of Rakuten Marketing to begin with.”

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DMEXCO: 'Customers Don’t Get Excited About Ad Products, They Get Excited About Experiences'

DanWrightAn emerging theme at the Digital Marketing Exposition & Conference (DMEXCO) in Cologne, Germany – where 30,000 digital marketers are convening – is building for future cross-channel experiences.

Amazon is no stranger to the concept. Although the ecommerce giant has, of late, been reportedly developing an ad platform to rival Google’s, the company maintains a maniacal focus on its shopper experience.

“When you think about all of the different points at which Amazon engages with customers – from sites to devices to delivery – the ways in which we can integrate advertisers across those touch points can take many different forms,” said Dan Wright, director of Amazon Media Group, Europe.

Ad formats that provide a call to action in the form of an actual utility, such as “add to wish list” or “subscribe and save,” perform on average 20-30% better than standard banners on Amazon.

Wright expanded on Amazon Media Group's priorities for marketers globally.
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Why Alibaba’s IPO Could Ignite A Commerce Spending Spree

alibabaAs Asia-Pacific commerce powerhouses like Alibaba and Rakuten push West, it’s still unclear how they will grow large US-based audiences. One such method is through acquisition.

Alibaba late last week priced its IPO at $60 to $66 per share and expects to raise $24 billion when the company begins trading on the New York Stock Exchange in the days to come. With a market cap of $155 billion, which was priced slightly lower than previous estimates of around $170 billion, it pits Alibaba just behind Amazon and Facebook in public market valuation.

Although Alibaba has singlehandedly cornered the ecommerce market in mainland China, an earlier investment in US-based subscription ecommerce site ShopRunner demonstrates interest in growing its domestic audiences, or at least to help US-based companies expand their Chinese footprint.

Alibaba faces a host of competitors in this regard, ranging from Rakuten Japan, (reportedly in talks to acquire ecommerce company Ebates for $952 million after spending a similar amount on messaging app Viber) to Amazon, which is doubling down on streaming media with its acquisition of Twitch.

AdExchanger asked Bryan Wang, VP, principal analyst and China country manager at Forrester Research, about Alibaba’s growing digital influence.

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Twitter Confirms Its 'Buy' Button Is Real

fb twit buyFacebook and Twitter are keen to build more commerce functionality into the social stream.

Earlier this summer Facebook began working with select commerce brands to support direct transactions on its platform, and Twitter has been expected to produce something similar after sharp-eyed users spotted a semi-functional "buy" button on the site in July. Well, now that other shoe has dropped as Twitter confirmed experiments in letting users transact directly from a tweet.

Initially visible to a small percentage of users and retailers in the United States, the feature will gradually roll out to more people and merchants. The first commerce partners include a few retailers like Home Depot, and musicians like Ryan Adams and Pharrell. (More in the company blog post.) Celebrities may be a natural fit considering how many use Twitter to communicate directly with fans about event tickets, album releases and the like.

Integrating commerce is about more than adding a new user feature, or creating a new sales channel for retailers; it's about gaining access to purchase and intent data, as Chris Copeland, CEO of GroupM Next, told AdExchanger in July when word of Twitter's buy button first leaked.

“Where it gets interesting is when you start to have purchase data and behavior data together,” Copeland said.  “Using historical data, commerce data, credit data as well as your behavior to give you things more relevant to your patterns.”

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