“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Paul Childs, VP of business development, Moloco.
Ever since the advent of the printing press, advertisers have looked to content publishers – from newspapers and TV shows to websites and mobile apps – to hawk their wares. A well-placed, precisely targeted ad that runs alongside engaging, informative and relevant content has always been an advertiser’s best hope of reaching their intended audiences and campaign goals.
But over the past five years, other non-publishing industries have begun running ads to grow their share of advertising revenue, too.
For advertisers, working with non-publishing industries has massive appeal. After all, they tend to have significantly more first-party data on their user’s preferences and behaviors than publishers. Throughout 2022, keep an eye on these key non-publishing advertising trends:
Continued growth in retail and ecommerce
Amazon’s ads business experienced massive growth throughout 2021, generating roughly $8 billion in revenue per quarter, primarily through retail media. But Amazon isn’t the only retailer cashing in on the trend. Walmart and Target are trying to court big brands by arguing their data is more actionable than other digital ad channels. While Facebook might know what customers like and Google might know what they’re searching for, retailers have unique insight into what products customers are actually browsing, searching and buying.
Even midsize retailers are looking to get in on the game. By making targeted product recommendations and promoting brands and products based on a customer’s purchase history, retailers take ad personalization to a deeper level.
Digital opportunities for grocery
Known for low profit margins and high competition, grocery stores have tried supplementing their revenue through advertising for years, mostly through screens on checkout lines.
But with the growth of online shopping and an influx of digital data on their hands, grocery stores know a lot about purchase behaviors, and they’re in the perfect position to upsell and cross-sell related products in new ways.
Grocers across the globe, including Kroger in the US, Carrefour in France and Sainsbury’s in the UK, are already offering retail media programs for endemic and non-endemic advertisers. We expect more of the top grocers to start adopting retail media solutions in 2022.
Life-stage data in financial services
From banks and credit-card companies to mortgage brokers, financial services firms capture a lot of data about our stations and stages in life. Major financial events – like a home purchase or the birth of a new baby – are some of the most effective predictors of future spending patterns and can enable unprecedented levels of personalization.
Even emerging financial services businesses like the red-hot Buy-Now-Pay-Later (BNPL) sector will eventually tack on retail media as a source of supplemental income.
Swedish fintech company Klarna, one of the leaders in BNPL, has already done so with the 2021 launch of its comparison shopping service, a tool designed to offer PLA hosting more effectively and affordably. The digital ad platform Cardlytics, meanwhile, has partnered with a number of banks to let advertisers run ads in their digital channels using first-party data.
Local advertising opportunities for travel
Travel companies are also in an excellent position to deliver relevant and personalized advertising. They know where we are, which enables them to tap into the lucrative local advertising industry. Airlines, hotels, car rental companies and travel aggregators can use geographic location to deliver relevant ads for local businesses like restaurants or entertainment venues.
Already, Priceline offers Sponsored Ads to let advertisers reach its 13 million monthly visitors, as does Orbitz for its 10 million visitors. As the travel industry continues to rebound from the pandemic, advertising could provide an excellent source of revenue.
Self-service ads in delivery
Services such as Instacart, DoorDash and Postmates have more than doubled their revenues in 2020, while gathering customer data in the process.
Instacart launched a self-service advertising program early in the pandemic to allow brands and agencies to run product ads on the Instacart marketplace. DoorDash followed suit in late 2021, allowing restaurants to stand out in an endless sea of listings based on location, delivery capacity and other variables.
In 2022, we expect other delivery services to roll out increasingly sophisticated advertising offerings for advertisers of all sizes, from local merchants to global brands. And that includes companies in the “people delivery” business, such as Uber and Lyft.
The stage for ad revenue is set
All of the pieces to allow non-publishing businesses to start generating advertising revenue are in place: Data has never been more plentiful, and the machine learning algorithms and technological infrastructure required to deliver relevant, personalized ads are here.
Meanwhile, consumer mindsets toward advertising are shifting. Rather than seeing them as annoying and distracting, shoppers see value in receiving hyper-relevant ads from brands they perceive as relevant and interesting.
As a result, we can now expect to see ads in places we may never have imagined.
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