Imagine it’s 1965. You’re waiting to catch your train with a fresh newspaper tucked into your pocket. When the train lands and the doors open, you eagerly find a seat, ready to sip on your coffee while browsing the day’s digest.
Let’s fast forward to 2019. This morning, what did you do on your commute? It very likely involved your phone — including some social media, a mobile news site, online shopping, or all three.
Times have changed and publishers have been forced to adapt. Gone are the days of publishers pricing out ad space in a publication based on magazine readership and calling up their local ad men to strike a deal. With the rise of digital, publishers have adapted ad-tech solutions to maximize the massive influx of viewers on their sites, and turned to what’s become profitable media businesses. To crack the media network nut, publishers have had to ask themselves: How can I manage the demand of brands looking to promote their products alongside relevant content while maintaining a quality experience on my site?
The answer to their qualms can be found in an equation: the right value proposition + the right people + the right technology.
According to Forrester’s report (published December 5, 2018) “Retailers – You’re the Next Media Moguls,” commerce companies are the new kids on the media network block. Per the Forrester report, written by Sucharita Kodali, with Fiona Swerdlow, Susan Bidel, Collin Colburn, Joanna O’Connell, and Heidi Anderson, top retailer sites like Walmart, eBay, and Target are seeing the traffic — from 65 to 140 million visitors per month. But historically, retailers haven’t gone all in on media products for fear of ruining the experience for their shoppers. With major etailers on the rise, in terms of not only sales but also generating a consistent stream of advertising budgets from brands, delivering a great user experience is more important than ever.
And this reluctance is justified. In The Forrester Retail Wave™: US Mobile Web, Q4 2017 (published October 26, 2017), analysts Brendan Miller and Jennifer Wise found that many retailers missed the mark on their mobile web experiences; “we encountered at least one glitch on most retailers’ mobile sites,” Forrester claims, specifically around site latency, load time, and checkout experience.
So how can retailers take on the beast of committing fully to building out media networks so they can diversify their revenue streams? Let’s take a look at the equation and how it applies to commerce.
The Right Value Proposition
If you look at Conde Nast Spire, Hearst Magazines Digital Media, or CNN International Commercial, you’ll find their clear value propositions, based on their unique brands and the opportunities they provide for their advertisers. Commerce companies can emulate this formula.
Retailers have their own unique identities, an active base of viewers, and valuable first-party shopper data. Plus, they’re already partnering with brands who are looking for opportunities to make their products stand out. In fact, according to Forrester¹, these brand marketers are looking for new advertising strategies in which to invest.
“Forrester puts global digital advertising at $219 billion in 2017, and 62% of all global online advertising revenue comes from Google and Facebook. Marketers, however, are open to new media publishers that have their own first-party data on shoppers, including store transactions, which still comprise 85% of total retail sales in the US.”
There is major opportunity for retailers who can enable their brand partners to differentiate themselves from their competition in valuable and engaging ways.
The Right People
As publishers have moved to becoming media-first, they’ve evolved their structure. Traditional editorial and marketing teams have evolved into organizations focused on building the right media products, developing partnerships with advertisers, and enabling the rest of the organization to support and evangelize these evolving value propositions. A startup within the greater company is a phrase that may come to mind.
Retailers are no different. For example, per Jeremy King, Executive Vice President and Chief Technology Officer, in his blog post (published February 14, 2018) “Walmart Labs: Our Journey to Change the Way the World Shops,” Walmart Labs was once a 60-person technical innovation lab. Now, it boasts teams including Customer Technology, Merchant Technology, Supply Chain Technology, Global Cloud, and Global Data and Analytics. As Forrester puts it:
“Media networks are hard to pull off with a skeleton team. For these solutions to work, they need sales teams to evangelize the products, a Google-like interface to easily enable marketers to buy the ads, and reporting to feed back to marketers on the performance of their ads. Test-and-learn and fail-fast efforts are commendable, but without resource ‘oxygen,’ these media networks do not scale.”
It takes a village of the right people to create, evangelize, and sell media products.
The Right Technology
Last but not least, publishers have implemented full advertising stacks, including supply-side platforms, header bidding solutions, and data management platforms, to monetize their advertising inventory, engage with their advertising clients, and give them access to innovative ways to promote their brand while targeting the right audience members. These solutions not only provide the automation they need to programmatically serve and manage ads on their site, but also ensure their first-party and advertiser data is secure.
As retailers build out their media offerings, having the right technology tools is essential. Brand advertisers are sophisticated; they have experience with media buying and choosing the right channels in which to invest their ad dollars. Some retailers have the resources and teams to build in-house solutions to support their internal and partner objectives. But in reality, many retailers will need an extra hand, and should invest their time in choosing the right technological solution that is has a quick and simple implementation, doesn’t impact their site experience, and enables them to generate consistent investment from their brand partners.
Are you excited yet? This is a massive opportunity for retailers to transform their revenue streams. There’s some bad news though, as etailers have gotten a head start. They’ve had years to focus solely on building out profitable online businesses, and collecting budgets from their advertisers is in their DNA. However, the good news is, it’s not too late to start. As commerce companies, you have access to invaluable shopper data, and your brands are looking to tie their marketing objectives to sales. So, now’s as good a time as any to start thinking like a publisher, or should I say, a media company?
¹”Retailers: You’re The Next Media Moguls”, Forrester Research, Inc., December 5, 2018
Want to learn more? Download the full Forrester Report!