By Brandon Lee, Director Addressability APAC at Pubmatic
Commerce media is hitting its stride from a growth and momentum standpoint, however there’s a flipside to that: In the rush to meet burgeoning demand, it’s easy to make missteps along the way. In our industry, we’ve seen this before—most notably in the early, rapid rise of programmatic media.
But commerce media isn’t destined to repeat the challenges of programmatic’s past. With a thoughtful and informed approach, commerce media has an opportunity to leapfrog its turbulent teen years by stealing the programmatic best practices of today’s media businesses. Let’s look at what this means from both a business model and customer experience standpoint.
Best Practices Learnt from Programmatic’s Past
Ad spend with retail media networks is expected to hit $100 billion by 2026 in the US.
Asia–Pacific contains four of the ten largest e-commerce markets worldwide due to high adoption of online services and large remote populations.
Hence our region is expected to follow the strong market growth in the US going forward.
But commerce media is much more than retail.
Any business with a direct line to rich first-party data—from travel and telco brands to rideshare and delivery services—has an opportunity to deliver highly relevant ad experiences in the context of consumer touchpoints. Some will develop capabilities internally, while most will do so via tech partnerships.
Much of this value is currently being built around a network model. The word itself—“network”— harks back to 2004 when digital advertising was exploding in size and scope. That model has evolved into the mature programmatic space we see today, but the path to today’s premium programmatic offerings hasn’t been without its challenges. If commerce media wants to grow sustainably, it should take note of the lessons learnt in the programmatic space:
- Ease for buyers: Brands are looking for the opportunity to buy high reach commerce media inventory through a solution that is simple and effective. Commerce media networks should consider a tech partner who can support brands to scale and manage their campaigns across multiple retailers.
- Transparency is key: Tapping into the network model at play in programmatic’s infancy meant giving up a lot of control and visibility in terms of where ads were running and how each ad dollar was being divvied up. Opacity should be unacceptable out of the gate.
- Data security : First-party data is extremely valuable to commerce companies, and they must ensure their data is secure within the supply chain in order to maintain their competitive advantage. Loss of data security is an unacceptable price to pay.
- Trusted partners: In the early boom days of programmatic, there were many busts as well. When programmatic players folded, the clients who had put all of their eggs in a single basket found themselves in precarious (and sometimes unrecoverable) positions. Commerce media players can avoid this by focusing on reputable, scaled partners and ensuring they work with several, not just one. This also encourages marketplace competition and drive further yield.
Customer Experience Should be a Priority
In the quest to avoid the pitfalls of programmatic’ s early days, let us not forget the other side of the coin: customer experience. Advertising is highly profitable but not the primary revenue driver for commerce companies; selling goods or services is. It is therefore imperative to preserve the experience of every customer.
Here are a few tips to keep the customer experience optimal in commerce media:
- Quality over quantity: As demand of commerce media increases, it is tempting to capitalise the demand by increasing digital inventory in the form of ad units and clutter the site with too many and intrusive ads. Site pages must be optimized for the consumer to avoid harming their experience.
- Native ad confusion: Native advertising represented a new wave of growth in the programmatic space, but it took a while for the industry to collectively adopt standards for clear disclosure of native ad experiences. That’s something commerce media players need to establish upfront.
- Respecting consumer privacy preferences: With stricter privacy regulations across the globe, commerce media companies must layer on privacy protections for their customers. They should partner with tech companies who have demonstrated expertise in this area, especially the ones with their own infrastructure and ad servers.
- Infrastructure failures: Finally, let us not forget the disruption that can come alongside dramatic shifts in tech infrastructure. Broken pages, slow or incomplete page loads have plagued digital publishers in their race to adopt new programmatic platforms. Moving deliberately at the right pace, and testing thoroughly with credible partners, can help commerce media players provide an optimal experience for their customers.
As commerce media navigates this period of growth, businesses must focus on sustainable practices and quality consumer experiences. By working with trusted partners, moving deliberately, and prioritizing transparency, stability and compliance. Commerce media players can save themselves—and their advertisers—a whole host of missteps on their path to maturity.
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