Starting early with native advertising, but not "too early"

Regina Ye, Co-Founder and CEO

May 12, 2022
2 min read
Native Ads
Auction Based Ads

Retailers are seeing the benefits from native advertising

More and more retailers are realizing the strategic benefits of implementing native advertising sooner than later, and treating it as a high. Thanks to the recent shift in technology (and hey Topsort!), fixed priced models and auction based models are getting more and more accessible. But as you plan out the scaling journey and growth goals of your recently founded marketplaces, and looking at potential monetization opportunities, the question becomes - Is my marketplace ready for this?

The Flywheel Starts Spinning

We all understand that marketplaces are very fragile ecosystems of supply and demand. From what we’ve seen, if you are still the most concerned with demand, aka the monthly traffic or the daily visits on your marketplaces, we’d say you are not the most ready.

Once the marketplace reaches the flywheel activation stage, when you are getting new suppliers signing up and new customers coming through your doors. You’re ready and it’s time to go into your goldmine called native ads. Good signs might be when brands ask you how to become advertising partners, when you start selling out of the giant homepage banners.

In fact, the native retail media attention has become so valuable you’ll want to have your advertisers compete. Auction-based systems are perfect to take you to the next level.

Number of Sellers

Topsort has a unique approach and believes in auction-based native advertising. On a fundamental level, our cofounder Michael Ostrovsky - a world renowned economist and game theory expert has said “for an auction to work, fundamentally you just need 2 guys to compete.” We’ve seen this to be true in practice.

In Topsort’s anonymized case studies, we’ve seen marketplaces with as many as 20 vendors participating in advertising to have a significant revenue lift that makes the endeavor meaningful. You can read more about a specific customer of ours - Babytuto, that’s been able to successfully running advertising and have a dozens of sellers running campaigns in auto bidding.

With technology, we’re breaking the barrier to the exclusive yet lucrative art of “auction-based advertising”. In fact, we now know the barrier for entry is less the scale of a marketplace, but more related to the amount of resources that large-scale marketplaces can afford.

So yes - 20 sellers are more than enough. Just having 1% of the sellers participating can already create a significant impact on monetization. Welcome to the great democratization of auction-based advertising. The same technology that powered the roaring success of Amazon ads in the past decade and some may say “better” than Amazon, is now available in a single API.

Unsure? Talk to us today.

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