2021 Commerce Partner Summit: Thoughts and statistics
Some thoughts and marketing statistics discussed at the Google event that are worth knowing if you sell or use advertising in your business.
Earlier this month, Google hosted more than 100 leaders from nearly 50 global retailers to discuss how e-commerce platforms are transforming digital advertising. Here are the most important lessons from the event:
Retail media has become mainstream.
Ad spending on e-commerce properties is expected to double in the next four years. It grew by nearly 50% in 2020 and will reach more than $40 billion by 2024. It is the fastest growing sector of the digital advertising market, surpassing even connected TV.
E-commerce and post-pandemic ad spending will continue to grow.
E-commerce sales in the U.S. in 2021 are projected to grow 18% to $933 billion, and more than 20% of all retail sales will be made online. Spending on advertising is expected to follow.
Retail media is grabbing a bigger piece of the marketing pie.
Retail media started with search placements (such as sponsored products). But advertisers are beginning to incorporate a full funnel experience, driving conversion, consideration and awareness through display ads. Marketing budgets initially earmarked for other purposes are shifting to paid media, bought programmatically, using data at scale to reach audiences and measure results.
Non-endemic budgets are becoming increasingly important.
Non-endemic ads – ads made by brands whose products are not sold in the online stores in which they advertise – have been bought by more than half of consumer goods brands, according to Merkle. These advertisers are finding retail sites an effective way to reach potential customers, especially as third-party cookies are phased out.
Display and video formats can help build brand loyalty.
Display and video ad formats on retail media networks are growing faster than sponsored products, according to Nicole Perrin. Brand advertisers prefer these display formats because they can highlight multiple products, getting customers interested in more options and building loyalty.
Source data activation is critical
By using ads based on source data, a large company like Best Buy increased conversion rates by up to 45% and increased return on ad spend tenfold for the consumer electronics retailer.
Retailers should act
Stop: watch and wait. If a company is not yet involved in this space, now is the time.
Start: Develop an audience view. Understand which potential customers may be of interest to particular brands, both endemic and not.
Continue: Focus on experiences that are beneficial to advertisers and consumers. Consumer attitudes toward ads on retailer sites tend to be more positive, especially when they are useful and relevant.
Now is the time for retailers to act in retail media.