AUCTION BASED
ADVERTISING

Topsort’s vision is to let you launch, scale, and optimize your ad platform on your terms, intelligently. We understand that each marketplace is unique and our ad formats can be configured to help you build an ad experience that fits perfectly into your business dynamics.

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That doesn’t stop us from improving the experiences to give you stronger and more flexible tools.

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We are excited to announce the launch of our new and improved banner ads experience. This revamp was driven by our commitment to providing you with a streamlined and intuitive platform to manage your banner ads.

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We’d like to explain why we decided to redefine the banner ads experience for retail media in the first place. If you want to jump to the product update details, just scroll down a little bit.

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Retail Media Banner Ads: Great potential with many challenges

Banner ads have been one of the most popular ad formats, but we can say they have been poorly used for decades and got notoriety because of cookie-based retargeting. With the rise of Retail Media banner ads, they seem to get their popularity back.

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But the way banner ads have been being leveraged, created challenges for their use with retail media.

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Relevance

Sponsored listings as the core format of auction-based ads have been the gold mine for marketplaces because they are relevant and don’t bother the users.

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Retail media banner ads, on the other hand, had the relevance issue. Category pages, search result pages, and other high-intent pages would benefit from relevant banners. But nobody likes to see the banner of “men’s boots” on the beachwear category page.

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This can be managed by marketplace admins by manually checking each banner and advertiser, which brings us to scalability issues.

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Scalability

What about when you have hundreds of vendors and hundreds of categories? How can you ensure all banner ads are relevant? Let’s add banners on search result pages to make it more complicated.

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How many people do you need in your management team to manage these thousands of variations?

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And even if you do, how can you price a banner that shows up when people search for “Valentine's day gifts for wife” during a peak season vs a banner ad on the gifts category page on any random weekend?

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Fixed prices can result in overpricing of the banners that result in unhappy vendors or underpricing that results in loss of ad revenue.  And, this is the 3rd challenge with retail media banner ads.

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Pricing

Marketplaces, retailers, and delivery apps are dynamic businesses. Each vendor and brand have different goals and budgets. The snacks category becomes more valuable during the World Cup finals than on Monday afternoons. Just to make pricing more complicated, there are also brands who want to improve their visibility on certain pages by showing a banner for a whole month.

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CPM, bids, or exclusive prices make the whole thing complicated. You might need a long spreadsheet to keep track of them. And don’t forget to report the results.

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When we launched our banner ads format, we addressed all of these solutions by combining auction-based high-visibility and mobile-friendly banner ads with a fully-configurable workflow.

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We turned a poorly used ad format into a premium offering.

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From working with many marketplaces, retailers, and delivery apps, we’ve also learned that each business has different dynamics and wants to create a banner ads experience that fits their businesses.

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They wanted more configuration with their retail media banner ads, easier management, and precise targeting. They also wanted to be able to have absolute control over their banner placements to offer exclusivity and fixed tenancy.

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Introducing Better, Faster, and More Configurable Banner Ads

Our smoother and more coherent new banner ads experience comes with improvements in three core areas: Configuration, Campaign Creation, and Targeting

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Configuration

You can create banner ads for search, category, and landing pages. With these 3 types of banner placements, you can serve banner ads for the entire user journey on your website or app. Now, you don’t need to spend time with Search and Category page banner ad slots because we got them configured for you. There is just one slot for category pages, and one slot for search results pages.

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Instead, you can define landing page placements, but faster.

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Your homepage, and the other high-value and specific pages that act as landing pages are perfect for banner ads dueto their high traffic. Using our intuitive UI, you can define as many placements as your want, like adding new rows to a spreadsheet.

You can create banner slots for multiple landing pages and even multiple banners for a single page. At any point, you can delete a configuration or add a new one. If you have a long list of pages and banner slots, consider bulk uploading the configuration.

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Campaign Creation & Management

We added new entry points to the campaign creation flow and improved the flow by adding more features.

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Now, as an admin, you can create banner ads campaigns directly on the configuration page. You can still visit the vendor page and launch a banner ads campaign. This new flow saves you time by letting you create banner ads campaigns for vendors (even multiple vendors) easily. You can promote a vendor, a product, or a URL.

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For faster campaign creation, use the “Create Banner” button or pick a slot from the list. Now, for each banner ad slot, you can upload different creatives for mobile and desktop, or crop one image to fit both.

Before launching your campaign, you can set a maximum CPM or turn autobidding on to maximize the results. By adding bidding to the banner ads, you can let multiple brands and vendors compete for that spot; bringing your banner ads to their true value and boosting your revenues. Both for autobidding and maximum CPM, you can set different daily budgets per desktop and mobile.

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On the Banner Ads Overview page, you can see all your configurations, as well as the performance of each slot. You can see the number of bids, impressions, and CPM for any date.

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Targeting

We implemented new targeting features to create a relevant experience for your visitors and premium ad formats for your vendors and brands. For landing page banners, the targeting is built in. By creating exclusive banner slots for each landing page, you are creating a premium placement for visitors to those pages. You can drive the traffic from banners to a product, vendor, or URL.

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For category and search result pages, you can target certain categories, keywords, and locations. Combine these targeting options to create banner ads campaigns to reach your desired audience with precision.

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Exclusivity and Fixed Tenancy

One of the most common requests we were receiving from our partners was about the fixed tenancy. Brands and vendors like to be shown on a certain category or landing page. With our recent update, you can create exclusive banners with a click of a button. When marked as exclusive, that banner slot will only be available to the vendors you pick and others can not enter the auctions for that spot during the exclusivity period.

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To make a banner exclusive, simply select Exclusive from “Bidding or Exclusive” dropdown on the last step of campaign creation and set the start and end dates of the exclusivity or tenancy period.

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It’s time to leverage banner ads to give your brands and vendors a chance to promote their brands and products while boosting your ad revenue.

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Have a question? Want to see our new banner ads flow in action? Let's talk

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In early 2015, Apple was facing a major problem. According to its own internal documents, its existing mobile advertising offering, iAd, was not competitive, and the business model was flawed, with high costs due to the need to pay publishers and the challenges of handling user data to achieve accurate targeting while preserving user privacy. 

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Something needed to be done.

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Two Options, Two Different Paths

Apple considered two options. The first option was evolutionary – to redesign its existing iAd business with better infrastructure and expand it to other properties – Apple News, Pay, Maps, Siri, etc. The second option, however, was radically different. Under this option, Apple would gradually close down its iAd business, and instead launch a completely new business: Search Ads in App Store.

The idea behind this second option was (in hindsight!) very straightforward. When an iOS user opens App Store and searches for, say, a to-do list app, then in addition to “organic” results returned and sorted by the App Store search engine, he would also get a “sponsored” listing – an ad from an app developer who is interested in promoting its app to the user searching for to-do lists. 

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If the user then clicks on the ad, the user is taken to that app’s page in App Store, and the developer is charged by Apple for that click. If multiple developers indicated that they are interested in showing their ads to users searching for to-do lists (as is likely to be the case), then Apple’s system runs an auction among them, with those bidding higher more likely to be shown to the user.

This is, of course, the same idea as the one behind Google’s AdWords or Amazon’s Sponsored Listings, responsible for generating tens of billions of dollars in revenue (and profit, due to very high margins!) on both platforms. And it would have the same attractive features: high relevance for the users, reliance on clear user intent (instead of fragile and sensitive behavioral and demographic data), and the fact that after clicking on an ad, the user would remain on the original platform, instead of leaving it.

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In Apple’s own words, Search Ads in App Store would “enable promoted discovery for developers,” be “a natural & highly profitable business for Apple,” and would have “relevance + bids create balance via algorithm.”

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Search Ads in App Store Go Live

It wasn’t clear how successful it would be in the new setting. And Apple did not really have a lot of experience running sponsored search auctions – they would need to spend substantial resources to develop such a platform from scratch, with estimated costs of many tens of millions of dollars per year. But on the other hand, Apple’s internal projections indicated that this would be a highly profitable initiative, with estimated internal rate of return (IRR) of 86.4%. 

And Google had just launched a similar initiative, Sponsored Apps in Play Store, just a few months earlier. So Apple went ahead with the “revolutionary” option – Search Ads in App Store.

After more than a year in development, Search Ads went live in October of 2016. 

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The results have been explosive. By 2021, Search Ads were making Apple an estimated $5 billion a year – by comparison, a company as popular as Snapchat had only made $4.1 billion from advertising that year. 

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As noted by one observer, "It's like Apple Search Ads has gone from playing in the minor leagues to winning the World Series in the span of half a year." And they are just getting started: according to estimates by the prominent investment bank Evercore, Apple’s annual advertising revenue to grow to $30 billion by 2026.

The meteoric rise of Apple’s Search Ads in App Store, echoing the earlier similar explosive successes of Google’s AdWords and Amazon’s Sponsored Products, once again reinforces the enormous power, upside, and profitability of a seemingly simple idea: Sponsored Search.

With the news of the decline in global venture funding and Sofbank’s posting record losses for its Vision Fund, Marketplaces and Retailers all around the world have a hard-to-ignore fear of recession these days.

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For many experienced entrepreneurs and professionals who have lived through the dot-com bust or the ‘08 financial crisis, weathering a recession might not be new. Entrepreneurs and marketplace leaders may need to revisit strategies to tackle the challenges that come with recession.VCs and large corporations are already revisiting their strategies in the face of current marketing conditions. One of the biggest venture capital firms, Sequoia Capital, shared their “digital toolkit” to help the startups navigate the challenging times ahead.

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Even in times of layoffs, and technical teams shrinking, we’ve seen that more and more companies are investing in monetization through offering native ads. 

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We took a closer look at the specific impact for marketplaces and ecommerce brands.

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Economic Impact on Marketplaces 

Over the years, the number of digital marketplaces grew rapidly and turned into highly valuable assets for retailers. With competition in the market, growth might have taken precedence over monetization for online marketplaces. 

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A significant decline in spending during an economic downturn creates challenges for marketplaces and retailers. While consumers will continue to buy the essentials–food, health, personal care, etcetera.–decline in discretionary spending is inevitable. 

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These behavioral changes push marketplaces towards changing their strategies towards focusing more on monetization, customer and seller loyalty, and growing market position. 

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Times of crisis also create the perfect conditions for the birth of new businesses. Marketplaces need to update their strategies to be well-prepared for the potential competition. 

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These crisis times are also an opportunity for expanding into new markets or new formats, however we believe that a marketplace needs to have a solid monetization strategy that works in recession times, before considering growth.

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The times of putting growth, or hypergrowth, as the top priority are gone, simply because the market is not rewarding the aforementioned growth the same way it used to. 

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Marketplace monetization as a key strategy

At its core, monetization is about increasing capital. Marketplaces need to find new strategies to stay profitable and competitive.

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Similar to many other businesses, marketplaces should focus on profitability rather than growth until the magnitude of the slow down in the economy is clearer. That doesn’t mean a complete stop on growth spending, but more of a balanced growth strategy with a focus on improving profitability.

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For marketplaces, the monetization models are limited, especially for the ones that are operational heavy. During this downturn, no matter what the business model is(subscription fees, commissions, listing fees, etc.), money flow needs to be optimized. 

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Tips to change your monetization strategy

Focus on profitability, now! 

After embracing reality, it’s time to act. You do not have years to plan your next steps. You know the market and your business. Do what is needed to preserve cash, increase the cash flow, and cut unnecessary expenses. Profitability is the main focus, now!

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The money you want to spend on the Superbowl Ads is better spent on increasing your employee, consumer, and vendor loyalty. Expensive sponsorship deals with Hollywood stars can wait.

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While optimizing your current monetization strategy, look for new methods. 

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Explore new monetization methods

While looking for new monetization methods, avoid drastic changes or complete overhaul, unless your marketplace monetization strategy is clearly not robust enough to support you through the recession.

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Instead, explore new methods that could easily fit in your current strategy. 

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Talk to your customers, vendors, industry experts, and discuss options internally. Study the quantitative and qualitative data to find a method that aligns with your vendors’ goals and enhances your customers’ experience.

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Help your vendors

Your focus is on growing profitability, but you are not alone in this game. As you’re looking to monetize in new ways, so are your vendors! Partner with them to find solutions that benefit both of you.

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Help them to thrive in these times by giving them the tools to sell more on your platform. Adapt a close feedback loop with them and respond proactively to market changes together.

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Monetization is as important for your vendors as it is for the marketplace.

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Native Ads as a Quick Monetization Method During Recession

Native ads are the perfect way to help your vendors sell more on your platform. In the form of sponsored listings and banner ads, they help your customers find relevant products and your vendors increase their sales. 

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Amazon’s +$30 billion dollar per year revenue from Amazon Ads shows the true potential of the native ads on a marketplace.

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Increased revenue and profits are the 2 immediate benefits native ads can give a marketplace or an e-commerce platform. That makes native ads a powerful and flexible monetization lever; something you need during the current market.

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Advertising made simple with Topsort

Thankfully, Topsort offers a great monetization method for marketplaces of any size. 

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With Topsort’s API-first solution, you can build a high-revenue ad platform for your marketplace in just weeks. 

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We’ve combined our expertise in game theory and auction design with marketplace and vendor priorities to bring you the best auction-based advertisement infrastructure out there. 

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Your vendors can also create effective ads with little angst and more confidence using our intuitive UI.

Retail media is probably the biggest trend in retail this year and is expected to grow by 26% to $30bn in the next couple of months. Its prominence has only been pushed further by the announcement of the disappearance of third-party cookies by Chrome and other major browsers.

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So, who is winning in the retail media world? Of course, we have to look at the pioneer of retail media: the giant that is Amazon. In 2021, Amazon brought in $31bn in ad revenue. To put that into perspective, Walmart, Amazon’s closest competitor in the retail media space brought in $2.1bn in ad revenue for the same year.

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As a retailer, why should I care?

First of all, BCG estimated profit margins for advertising on retailers' own channels to be as high as 90%.

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Secondly, you have to stay competitive. Your vendors and brands are selling across multiple sites, perhaps including Amazon. If every other retailer offers them the opportunity to promote their products and increase sales, then why should they stay with you?

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Finally, retail media is a great source of first-party data about your customers and vendors, especially prominent as third-party data is so hard to come by. With all this in mind, as a retailer, how can you be a “winner of retail media” and take a slice of the cake?

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1. Relevant, high-quality content

As a retailer, there’s nothing worse than the fear of customers coming on your site and then clicking on an ad that takes them to a different site. Or, if your design team has worked so hard to build an aesthetic sight for a third-party ad to start advertising flip-flops with a flashing red and yellow banner. Retail media is different; all the advertising is done by your existing vendors, and the ad can be as simple as a well-designed “Sponsored” tag. Even better, the ads will only be placed in high areas of relevance. For example, if you’re browsing sunglasses, you might see a video product listing for a sunglasses ad.

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2. Flexibility and fluidity in the Omnichannel world

Retail media platforms are tech-heavy. This is why so many retailers chose to partner with retail media providers like Topsort who have the infrastructure perfected. Omnichannel is the buzzword of the retail world at the moment and without retail media, there is no buzz. Selling and advertising across multiple channels, having a presence online and in-person, and of course, creating a relevant ad platform is a necessity to thrive in 2022 retail. As a retailer, you might have brick-and-mortar stores, but a profitable online store is a whole different business.

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3. Vendors WANT this... so make onboarding simple!

Retailers make their money by vendors paying to promote their products and listings, so, the easier your retail media platform is, the better! Some brands have specialist advertising teams that create campaigns full-time, but the midsized and smaller vendors do not. Advertising should be simple, intuitive, and available without embarking on a huge training program. Successful retail media platforms are offering vendors "free ad credits" to get started. This way, they can test out making campaigns, see the results and ROAS and put their own money in!

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4. Keep pricing dynamic (even better auction-based)

Pricing ads is hard. Correction, pricing optimally is near impossible. Why? Because dynamic market changes and fluctuations are too much to keep track of. Retail media platforms that price their ads based on vendor auctions have a much greater chance to exceed revenue expectations and save employee time! Retail media infrastructure with machine learning functionalities can assess these factors that influence prices within a fraction of a second and adjust accordingly for price optimization.

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5. Real-time reporting

Data is of course at the forefront of advertising with retail media. Vendors want to track and see reporting of their campaigns to assess their ROAS and CTRs. Retailers want to track the progress of the overall platform and be able to zoom in to analyze the performance of individual brands, products and campaigns. Real-time reporting ensures transparency and ease of data extraction. It's also great in customer support to help out vendors in real-time. As third-party cookies are phased out, data is one of the most valuable sources on the internet. Retailers using retail media can learn from each campaign with hundreds of thousands of data points every day.

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The buzz of retail media is still on its way up and the potential to get on board is huge. 65% of top US retailers have an existing media monetization program with many more in the pipeline. As digitalization and e-commerce continue to rise, and the share of the retail media pie starts to shrink, now is the time to launch your retail media offering.