Airbnb and Asos mull advertising services revenue

As Asos becomes one of the latest retailers to expand its retail media capabilities (and inventory), and Airbnb considers matching its ad-ready rivals, everything is either becoming an ad network or thinking about it. 

Why it matters

What’s the common factor of all the companies now doing or thinking about making a retail media play? They tend to have enormous scale, but the cost of their operation means that scale doesn’t translate easily into profits – and this is especially true of e-commerce firms. Advertising services offer the chance to buck the trend, by selling ads targeting audiences searching with intent to buy.

As more and more retailers build their own networks, the experience for advertisers is getting more complicated. With so many new platforms and few standards or common cross-platform measurements, it’s becoming a case of have to buy rather than want to buy.

Airbnb

Research from Skift estimates that the size of the rental platform’s opportunity could be $1.25 billion, based on 1% of gross bookings, by 2026.

“I think it’s a massive opportunity,” CEO Brian Chesky told a Morgan Stanley conference recently. He said he could “easily” imagine adding a few equivalent percentage points of take rate if you were to scale that over time. “I think there’s a lot of comparables like Amazon, one of the largest advertising platforms now in the world, Etsy or Alibaba or even Booking.com.”

Asos

Similarly, Asos – which is facing broadly challenging trading conditions – is also eyeing an expansion of its retail media that it initially set up in 2021, The Drum reports.

“The sponsored ads are a really effective addition,” Elton Ollerhead, director of Asos Media Group, told the magazine.

“It’s a low-funnel tactic when people are intently searching for a specific item, so that’ll help brands really showcase their product at a time when people are ready to buy.”

Sourced from WARC, Skift, The Drum