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Find exclusive content, news from the industry, research and inspirational success stories from the biggest marketplace and multi-brand retailers in the world. Deep dive in the world of real-time auctions and stay sharp!
Leading delivery app Glovo launches their dream media ads platform and easily scales up to 40x vendors in 3 months with custom-built tools and features from Topsort.
How Auction-powered Sponsored Listings Grew into a Pillar of Profitability for Amazon
Is It Time to Upgrade Your Advertising Business?
Julián Mayorca
Global Head of Monetization at Rappi
See how the biggest marketplaces, delivery apps, and retailers launched their monetization journeys with Topsort’s APIs
and tools
Keep up with the industry with our original articles about the auctions based advertising, marketplaces, monetization tech, and native media and more!
May 23, 2023
Autobidding Tab provides enhanced control and insights for ad businesses to help you build, scale, and optimize your ad businesses, on your terms
At Topsort, we understand that no two marketplaces are alike. We believe in empowering you to tailor your ad platform to your unique needs. That's why we offer solutions that are far from a 'closed box'.
Instead, we offer tools that give you the reins of your ad platform, driving growth and efficiency in a way that works best for you.
Today, we are thrilled to announce the launch of our new Autobidding control feature in the Topsort admin dashboard. Autobidding Tab provides enhanced control and insights for ad businesses to help you build, scale, and optimize your ad businesses, on your terms.
Here's what you can now do with the Autobidding Tab:
- Monitor Ad Performance: View your ad platform’s Return on Ad Spend (ROAS), Cost per Click (CPC), and Cost per Mille (CPM) trends.
- Set Target ROAS: Adjust the Target ROAS for your marketplace as per your business objectives. Simply click on the “Change” button and set your new target ROAS. You can also, track changes to Target ROAS over time to understand your performance trends and make more informed decisions.
- View Reserve Prices: You can now see the reserve prices for sponsored listings and sponsored banners on the Autobidding Tab.
- Vendor Monitoring: Keep an eye on each vendor's ROAS, and see if they are using autobidding for their sponsored listings and/or sponsored banner campaigns.
We are confident that autobidding control offers marketplaces more transparent advertising and intelligent tech-driven decisions while taking the guesswork out of running an efficient advertising business.
With Topsort, you're in control. With the autobidding tab, you have unparalleled control and insights over your ad platform.
Let's continue building, scaling, and optimizing your ad business together.
Do you want to learn more about autobidding control? Book a demo today and see it in action
May 4, 2023
eBay's sponsored listings revenue keeps growing even though GMV and overall revenue growth appear to have slowed down in recent years.
Amazon made $38 billion from auction-based ads in 2022, and Walmart turned its ad business into a $2.7bn revenue engine. Alibaba, eBay, Home Depot, Tesco, Kroger and many other businesses around the globe have launched their own ad businesses and are enjoying this high-margin business. Some reveal their ad revenue numbers in the quarterly and annual earnings while the majority still keep their ad revenue a secret. Those who reveal the revenue numbers tell some great stories.
We won’t discuss the benefits of auction-based ads or retail media in this post. You can visit our resources to view many articles covering that. We will take a deep dive into another key player that tells a different story: eBay and its ad business.
Let’s start with how eBay is doing. With a long-standing reputation as a global online marketplace, eBay has successfully connected buyers and sellers worldwide but in 2022, things were not going well for them.
In 2022, eBay reported a net loss of $1.27 billion even though last year it made a net profit of $13.6 billion. In the same year eBay reported a net loss for the first time after 5 years, it also reported a record revenue amount for its first-party advertising business: $979 million.
In the first quarter of 2023, the revenue from promoted products reached a record $285 million.
eBay’s monetization journey using sponsored products started in 2015 and the eCommerce platform consistently mentioned the “focused on its growth opportunities in Advertising” while using “sponsored products” and “first-party advertising” interchangeably to describe it.
For eBay, sponsored products were the perfect tool for capitalizing on their rich customer data to deliver highly targeted and relevant ads. This not only generates additional revenue through advertising sales but also enhances the user experience by presenting eBay shoppers with personalized product suggestions. Auction-based ad platforms foster strong collaborations between the marketplace and brands, offering valuable marketing opportunities for sellers and creating a more efficient shopping experience for consumers. Ultimately, this symbiotic relationship drives sales, boosts customer satisfaction, and strengthens the marketplace's competitive edge in the eCommerce landscape.
However, the plot of this journey slightly changed for eBay in recent years. Advertising had a way different trend than the rest of their business.
eBay’s first-party advertising revenue consistently grew even when the GMV decreased. Initially boosting eBay’s profits, the $979 million revenue from this high-margin business in 2022 put on a new role: offsetting the eCommerce giant’s losses.
Sponsored listings, or first-party ads, enable sellers to promote their products more effectively on eBay's platform. A visit to eBay category or search result pages shows how generously Sponsored Products are used.
An essential aspect of eBay's approach to sponsored listings is its focus on relevance. eBay prioritizes showing ads that are closely related to buyers' searches to ensure a seamless browsing experience. This relevance-based ad delivery creates a win-win situation for both eBay and its users: sellers benefit from increased exposure, while buyers can quickly find what they are looking for.
Knowing the importance of sponsored products, eBay kept improving its offerings:
In 2021, eBay Ads introduced Automated Promoted Listings Campaigns, to help sellers easily promote their products. In the same year, eBay launched Promoted Listings Advanced and Promoted Listings Express expanding their ad portfolio.
In 2022, eBay added one-click campaign creation solution titled “Quick Setup” to their “Promoted Listings Advanced” users. Also, in 2022, they launched new tools to allow sellers to delegate their campaign management to agencies.
In the 2022 Q4 earnings call, eBay CEO Jamie Iannone shared their vision for eBay’s ad business which adds up to 1.6% of their GMV
“We have line of sight to 3%, which we still feel great about. If you look at the performance, promoted listing standard continues to be the workhorse of the product, and we're continuing to drive additional penetration there, hitting 2 million sellers and 700 million listings,” Iannone said. “But we're also excited by our new products.”
Analyzing eBay's financial data between 2019 and 2022 offers valuable insights into the success of its sponsored listings strategy. In this period, eBay has demonstrated remarkable growth in its first-party ads revenue, with a steady upward trend year over year. For instance, ad revenue increased from $65 million in Q1 2019 to $276 million in Q4 2022, showcasing a substantial growth in this revenue stream. First-party ads were 1.5% of the eBay GMV in 2022.
However, when comparing this growth with GMV and total revenue trends, we observe a contrasting picture. While ad revenue experienced consistent growth, GMV and revenue growth rates appear to have slowed down. For instance, GMV peaked at $27.5 billion in Q1 2021 but dropped to $18.2 billion in Q4 2022. Similarly, revenue reached a high of $3.0 billion in Q1 2021 and then declined to $2.5 billion in Q4 2022.
This divergence in trends might be attributed to several factors. One possibility is that sellers have increasingly adopted sponsored listings as an essential tool for visibility on eBay's platform, leading to higher ad spending. We know this from the adoption of the ads by eBay sellers. The number of sellers using sponsored products jumped from 400,000 in 2018 Q3 to more than 2 million sellers in 2022 Q4.
Another possibility is the changes in the advertising sector that shifted ad dollars from Search and Social Media marketing to more effective channels like retail media. The death of cookies is likely another reason for sellers to shift their ad spend to channels with 1st-party data.
However, this spending might not necessarily translate to a proportional increase in GMV or revenue due to market competition and external economic factors.
eBay's sponsored listings have proven to be a successful venture for the company, as evidenced by the steady growth in first-party ad revenue even though GMV and overall revenue growth appear to have slowed down in recent years.
eBay's focus on growing its ad business won’t seem to slow down. Going forward, it will be interesting to see how eBay continues to evolve and adapt its strategies to ensure sustained growth and success in the increasingly competitive online marketplace.
What we see in eBay’s case is that ads not only can help you boost your revenues, but they can also offset your losses and keep the business running during uncertain times.
Find out how much revenue you can generate from sponsored listings. Get a complimentary analysis and expert insights from Topsort team.
March 24, 2023
Marketplace and vendor level metrics all in one place for easier comparison and real-time data analytics
We are excited to announce the Analytics tab for those of you wanting more real-time insights and deeper analytics of their ad businesses.
Performance monitoring is a crucial part of ad business management. In addition to marketplace-level metrics, admins need a birds-eye view of vendor performances and want to be able to see how each of them is doing.
We already have very robust reporting and analytical features within the admin dashboard, but we heard that some of our partners were going through manual processes to better understand metrics.
We know that you want to have a clear understanding of how your ad platform is performing and what your vendors are doing, but sorting through data from multiple sources, exporting and importing vendor metrics, writing formulas, and making comparisons can be overwhelming.
Topsort's Analytics is a new section on the admin dashboard that provides you with the visibility you need to effectively manage your ad business. Topsort Analytics gives you insights on both marketplace and vendor levels.
At the marketplace level, you'll be able to see 10 key ad metrics to have insights about how your ad business is doing for any time frame you pick. You'll also be able to view trends for each metric by comparing them over any selected time period.
At the vendor level, you'll have a column list of all your vendors, with each row representing the vendor's ad metrics. Using the vendor analytics table, you'll be able to see how each vendor is performing, and make informed decisions to optimize your overall ad performance.
You can customize the vendor table to view to display the metrics you selected. If you still want to use another tool to analyze these numbers, you can still export all data. Customize the export file with the metrics that matters to you the most for any time period you want.
With Topsort's Analytics, you can say goodbye to the hassle of using multiple data analytics tools, and hello to the convenience of having everything you need in one place. Upgrade your ad management game with Topsort's Analytics today!
Do you want to see analytics tab and other Topsort features in action? Book a demo today!
March 8, 2023
We launched a new and improved banner ads experience with improvements in configuration, campaign creation, and targeting.
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.
That doesn’t stop us from improving the experiences to give you stronger and more flexible tools.
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.
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.
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.
But the way banner ads have been being leveraged, created challenges for their use with retail media.
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.
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.
This can be managed by marketplace admins by manually checking each banner and advertiser, which brings us to scalability issues.
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.
How many people do you need in your management team to manage these thousands of variations?
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?
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.
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.
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.
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.
We turned a poorly used ad format into a premium offering.
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.
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.
Our smoother and more coherent new banner ads experience comes with improvements in three core areas: Configuration, Campaign Creation, and Targeting
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.
Instead, you can define landing page placements, but faster.
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.
We added new entry points to the campaign creation flow and improved the flow by adding more features.
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.
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.
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.
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.
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.
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.
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.
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.
Have a question? Want to see our new banner ads flow in action? Let's talk
Mar 8, 2023
We launched a new and improved banner ads experience with improvements in configuration, campaign creation, and targeting.
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.
That doesn’t stop us from improving the experiences to give you stronger and more flexible tools.
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.
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.
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.
But the way banner ads have been being leveraged, created challenges for their use with retail media.
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.
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.
This can be managed by marketplace admins by manually checking each banner and advertiser, which brings us to scalability issues.
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.
How many people do you need in your management team to manage these thousands of variations?
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?
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.
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.
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.
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.
We turned a poorly used ad format into a premium offering.
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.
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.
Our smoother and more coherent new banner ads experience comes with improvements in three core areas: Configuration, Campaign Creation, and Targeting
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.
Instead, you can define landing page placements, but faster.
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.
We added new entry points to the campaign creation flow and improved the flow by adding more features.
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.
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.
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.
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.
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.
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.
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.
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.
Have a question? Want to see our new banner ads flow in action? Let's talk
Oct 27, 2022
Apple explored the power, upside, and profitability of "sponsored search"
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.
Something needed to be done.
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.
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.
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.”
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.
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.
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.
Oct 20, 2022
Key to breaking through marketplace monetization in uncertain times ahead
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.
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.
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.
We took a closer look at the specific impact for marketplaces and ecommerce brands.
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.
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.
These behavioral changes push marketplaces towards changing their strategies towards focusing more on monetization, customer and seller loyalty, and growing market position.
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.
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.
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.
At its core, monetization is about increasing capital. Marketplaces need to find new strategies to stay profitable and competitive.
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.
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.
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!
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.
While optimizing your current monetization strategy, look for new 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.
Instead, explore new methods that could easily fit in your current strategy.
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.
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.
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.
Monetization is as important for your vendors as it is for the marketplace.
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.
Amazon’s +$30 billion dollar per year revenue from Amazon Ads shows the true potential of the native ads on a marketplace.
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.
Thankfully, Topsort offers a great monetization method for marketplaces of any size.
With Topsort’s API-first solution, you can build a high-revenue ad platform for your marketplace in just weeks.
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.
Your vendors can also create effective ads with little angst and more confidence using our intuitive UI.
Aug 24, 2022
As a retailer, are you doing everything you can to take a slice of the retail media pie?
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.
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.
First of all, BCG estimated profit margins for advertising on retailers' own channels to be as high as 90%.
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?
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?
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.
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.
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!
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.
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.
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.
Wondering how the real-time auctions work? Read articles about the auctions, sponsored listings, and common features of auction-based advertising
A revenue-optimal ranking rule that takesinto account effects on advertiser satisfaction and user experience
Results of a large field experiment on setting reserve prices in auctions for online advertisements.
Does advertising serve as a signal? Evidence from a field experiment in mobile search
For those who really want to get in the world of auctions and game theory! We curated scientific papers and researches that shaped real-time auctions!
Towards Efficient Auctions in an Auto-bidding World
Could auction welfare and revenue be improved in auto-bidding environments?
Budget Pacing for Targeted Online Advertisements at LinkedIn
An experiment on Linkedin Ads to make ads beneficial to advertisers and publishers!
Multiplicative Pacing Equilibria in Auction Markets
Can markets have multiple pacing equilibria with variations in natural objectives?
Autobidding with Constraints
What happens when all advertisers adopt optimal autobidding?
A bid optimizing strategy which automatically adjusts the bid to achieve finer matching of bid and traffic quality of page view request granularity