Online Marketplaces, the Sleeping eCommerce Giant

Only ten percent of the five trillion in total annual sales in 2018 is attributed to digital channel sales[1]. However, the future is bright for eCommerce as eMarketer forecasts that sales will grow by nearly 70% by 2022. That’s a lot of growth happening quickly, which is why eCommerce platforms have been called the sleeping giant.

Over the next four years, it’s projected that 83.2% of the total digital population will be shopping online, which is 12M new digital shoppers by 2022.[2]

As more and more people are conducting their shopping digitally, eCommerce platforms are leveraging shopper data to constantly develop new ways to make digital experiences more personalized, fluid and intuitive. This, in turn, is driving the growth of shoppers and sales.

Where there’s engaged shoppers and massive amounts of data being collected, there’s going to be advertisers. If Amazon is an indicator of how advertisers will leverage the ever-growing eCommerce market moving forward, business will be booming. In 2017, Amazon was the second-fastest-growing major digital ad firm in terms of ad revenue. It’s expected that Amazon’s net US digital ad revenues will increase by 42% in 2018[3].

Amazon isn’t the only eCommerce site growing their ad business. eBay Advertising has seen exponential growth over the past few quarters. In fact, Promoted Listings on eBay contributed one point of eBay’s 7% transaction revenue growth in Q2 of 2018. As of Q2 2018, there were over 300,000 sellers promoting 150M listings on eBay and Promoted Listings has the potential to boost visibility by 30% which is why large brands are taking advantage of this opportunity.

It’s forecasted that global digital media will account for 43.5% of investments this year and it’s thanks to rising global ecommerce spending and shifting viewership from traditional TV to digital channels[4]. In other words, as eCommerce rises so does the market for digital ad spend. US digital advertisers have spent about $111B dollars on digital placements so far this year, which is a 26% increase from last year [5]. It’s also forecasted that by 2022 digital ad spend will make up nearly 65% of total media ad spending[6] .

This growing trend will shake up the digital advertising world as we know it where the Duopoly, Google and Facebook, have been dominating the field. With more dollars devoted to digital ad spend and the strong growth of online shoppers, it’s anticipated that eCommerce will thrive.

Here’s Why:

Rich Audience Data & Targeting at Scale

eCommerce sites have troves of shopping journey data that provide a deep level of understanding of who their shoppers are and how they shop. Turning this shopper data into powerful insights is key for fueling successful ad campaigns.

These eCommerce platforms are among the most effective digital channels for collecting marketing data, according to US marketers[7]. A study by BARC says some benefits of using big data from eCommerce include making better strategic decisions and gaining a better understanding of customers.

Digital shoppers are starting their hunt for products on eCommerce sites with increased frequency. In 2018, 28% started their searches on platforms like eBay or Amazon, up from 22% in 2017[8] . With eCommerce dominating as a search and discovery platform, there are strong shopper intent signals that can be leveraged by advertisers.

Shopper intent data is just one of the many examples of the valuable insights eCommerce sites capture from shoppers that can be leveraged by advertisers looking to connect with shoppers in the conversion mindset. Allison Giorgio, Head of Marketing at PUMA North America shared in a CMO Council report, “Without a doubt, the data that eCommerce sites are able to gather allows us as marketers to make better decisions and to understand exactly who is purchasing our products.”

Contextually Relevant, Beyond Audience Targeting

Contextual targeting is rising in importance. While reaching a quality audience at scale through traditional targeting tactics is important, another key to campaign success is to engage consumers while they’re in contextually relevant places.

Understanding the context someone is in when they encounter an ad is key to make sure it resonates. For example, if a shopper is demographically targeted with clothing and accessory ads while he or she is reading the Financial Times, he or she is likely to be less open to the ad. In this example, he or she is not necessarily in the “shopper mindset” however, if he or she encountered the ad while visiting an eCommerce site they’re in a different mindset and are more ready to transact as they’ve got their wallet in hand.

Quality is Key

In an April 2018 study commissioned by Oath, 99% of respondents expressed concern about their ads appearing in brand-safe environments. Fifty-eight percent of those respondents said they were more concerned about brand safety this year than they were in 2017. Clearly, brand-safe environments are top of mind for marketers when making their advertising decisions.

By their very nature, eCommerce platforms are typically free of controversial content that can sometimes plague traditional publishers or social platforms. Shopping platforms provide the quality environments that advertisers want and the brand safety they need.

But quality isn’t just about the environment that an ad appears in, it’s about the audience that’s exposed to the ad. In today’s digital world, non-human traffic is yet another challenge that marketers contend with. Again, this is a place where eCommerce shines. For example, 80% of eBay’s users are persistently logged in, providing advertisers with piece of mind that their ads will be seen by real people, not bots.

An Ad Age article said it best, “For now, the real solution is for marketers to focus on quality placements with trusted publishers. This proven strategy ensures a brand-safe environment. Only when brands partner with reputable publishers can they have full confidence in where their ads are being placed.”

Takeaway

When and how we shop has changed and – as a result – advertisers must adapt to the new reality. Partnering with an eCommerce site to devise a strategic advertising campaign will unlock powerful shopper data and can give brands the edge they need in a highly competitive space.

[1] Source: https://forecasts-na1.emarketer.com/5a53eff9d8690c0d70ffaa00/585191890626310a2c186889

[2] Source:  https://forecasts-na1.emarketer.com/584b26021403070290f93a27/5851918a0626310a2c1869d9

[3]Source:  http://totalaccess.emarketer.com/reports/viewer.aspx?r=2002189

[4]Source:  https://content-na1.emarketer.com/emarketer-total-media-ad-spending-worldwide-will-rise-7-4-in-2018

[5] Source: https://www.emarketer.com/Webinar/Digital-Advertising-on-Amazon-DuopolyWhat-Means-Everyone/4000184?formcompleted=true

[6] Source: https://www.emarketer.com/Webinar/Digital-Advertising-on-Amazon-DuopolyWhat-Means-Everyone/4000184?formcompleted=true

[7] Source: http://totalaccess.emarketer.com/chart.aspx?r=217187

[8] Source: https://content-na1.emarketer.com/repeat-buyers-favor-marketplaces-over-retailers

Leanne Cozart

Content Marketing Manager at eBay Advertising

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