A WARC Trend Snapshot notes that in a regulatory landscape in which it is becoming harder to exploit third-party data pools, there are clear benefits to the GDPR-compliant granularity of a retailer’s customer view.
If brands are able to get their own first-party data in order, the potential to combine datasets with commerce firms to produce deterministic data is highly appealing for advertisers, the report says.
Accordingly, retailers like Walmart, Kroger and Target are exploring if, like Amazon, they too could exploit the customer data they possess and build an advertising business, with the aim of both increasing basket value and using ads to mitigate revenue losses.
He cited a US-based CPG company with annual revenues of $300m, which used sponsored ads to increase its Amazon business by 9% within a matter of weeks.
But the new wave of retailers has some advantages over Amazon, being able to create a more unified in-store and on-site experience for advertisers.
And, points out Daniel Gilbert, chief executive at UK-based PPC agency Brainlabs, “some brands actively avoid using Amazon Ads because they want to own the whole customer journey experience from start to finish through their own platforms, or they see the site as a direct competitor.
“Alternatives to Amazon will benefit from this sentiment,” he argued.
Where Amazon remains strong, however, is in scale, and few companies will match North American chains like Walmart and Kroger, with thousands of stores and tens of millions of customers.
Smaller local players will find themselves challenged by the high costs of servicing an ad platform, as well as providing the creative and insights support than many brands will require, the Snaphot says.
But this provides an opportunity for third-party ad tech companies, as well as agency holding groups, which have thus far mostly struggled to gain a foothold in the e-commerce media landscape.
Sourced from WARC