Understanding the most popular ad placements on retail media

Retail media or advertisements placed on a retailer’s website to influence the customers buying decision at the point of purchase have seen their adoption going through the roof amidst the pandemic, and brands want to reach out to their consumers wherever their purchase intent is at its peak. Moreover, retail media creates an additional revenue stream for retailers in the already thin-margin e-commerce business. Some retailers have taken to advertising in a big way riding on the humongous amount of customer data they have generated over the years, with the most notable being Amazon.

Although retail media provides a significant revenue generation opportunity for retailers, they are always in a dilemma on how much advertising space they should make available on their website for the advertisers. Creating too much inventory means disrupting the user experience while under-utilizing the ad space will be a lost opportunity for the retailers. Retail media networks should also be mindful of creating innovative ad formats and placements to reap maximum benefits without being too intrusive. This blog will discuss some of the most popular ad formats and their placements on the retailer’s website so that it increases revenue for all stakeholders.

Banner Ads on Homepage

Banner ads on the homepage of the retailer’s website are usually at the top of the page, which can be either static or carousel in nature. This is a premium ad space for the advertisers, generates the bulk of revenue for the retailer, and often showcases the best deals and offers to the users. In addition, banner ads can be placed at multiple locations on the website, like at the bottom or on either side of the page, giving various placement options to the retailers. These ads can be the same for all the users across the website, and mobile apps or retailers can personalize them for each user segment based on their shopping behavior.

Sponsored Brand Ads

In this advertisement category, brands are offered advertising space on the retailer’s website to showcase their best products and offers to consumers looking for similar products to lure them into purchasing the sponsored brand whose ads are visible. For example, if a consumer searches for a smartwatch for men, the detailed page will also showcase the brand advertised with the retailer on top along with organic results. This ad placement creates high-brand visibility and increases the conversion for the advertisers while earning significant revenue for the retailers. This ad type works well for new entrants in their categories who need the extra push to create a space in the minds of their target audiences.

Sponsored Product Ads

Sponsored product ads are one of the most subtle ways of advertising your product on the marketplace as it comes across to the user as an organic advertisement and hence does not disrupt the user experience. And it also delivers solid results for the advertisers. So, for example, if a user searches for sports shoes for men, the website will showcase the results for the search, which will have a mix of organic and sponsored ads in no particular order. There is not much difference in how the sponsored product is displayed on the website alongside the organic result. What tells them apart is the word sponsored written in tiny fonts on the sponsored product ads, which sometimes skips the consumer’s consciousness. In other words, sponsored product ads appear just like native ads on the search page, lending them more credibility.

Sponsored Display Ads

These ads appear at the bottom or right of the product detail page in the form of ‘similar products you might be interested in’ or ‘similar items you may like’ sections. These ads allow the advertisers to understand the browsing and search patterns of the customers and quickly put their product in front of the user so that they can compare and make an informed purchase decision. When the consumer is exploring the product detail page, their intent to shop for that product or similar product is very high, allowing advertisers to attract the consumer’s attention to their offerings. While it benefits the advertisers, the customers also get more options to choose from, enhancing the overall shopping experience.

Video Ad Placements                                                                                                                                    

These ads appear on the product listing page when the user searches for a particular product on the retailer’s website. Video ads usually perform better than static ads and thus help retailers and advertisers generate better revenue. It also improves the user’s shopping experience. Amazon is a prime example of a retail media network that leverages video ads to its full potential. Multiple advertisers on each product page will pay to run their video ads on the marketplaces as the ROI generated is on the higher side. Even Walmart has started experimenting with video ads on its online commerce website.

As the retail media space is still evolving and many more retailers are expected to embark on this journey, the way ads are placed and the inventory is utilized will also proliferate. Retailers will try to find ways to generate maximum revenue from the ad placements on their websites while keeping the user experience in mind; advertisers will also look to push innovative ad methods on these marketplaces to reach more extensive and relevant audiences.