3 Ways To Recapture Ad Revenues in the Wake of Supply Chain Crisis
Karen Ho, VP of Mobile Engineering, Swiftly, discusses how offline retailers need to build out their digital advertising capabilities to unlock this revenue stream and prevent large delivery players like Instacart and DoorDash from taking everything, including advertising before ad budgets run dry.
[Excerpt from the Toolbox article, posted March 22, 2022.]
Disruptions to the supply chain are forcing marketers to slash their fourth-quarter ad budgets from 10% to 50%, according to Business Insider. This move could have serious implications for retailers’ digital ad revenue.
As brands scale down ad spend, competition for their remaining ad dollars is heating up. But according to eMarketer, Amazon already holds 10% of the U.S. digital ad market share, and other big players like DoorDash are rolling out ad platforms to compete.
To remain competitive, retailers and grocers need a more effective retail media strategy. By owning the customer journey and creating personalized experiences, retailers can drive value for brands and capture their market share.
See More: The Shift To Programmatic CTV: Why Healthcare Marketers Need To Go All-In To Grow
The Consequences of the Supply Chain on Ad Budgets
Many retailers pushed out holiday ads earlier than ever and encouraged shoppers to get a head start on holiday shopping last year to combat product stock shortages and shipping delays in the supply chain. However, brands reduced their ad budgets to account for increased shipping costs and ensure they had product inventory to sell.
Marketers are now adapting to these moves by transitioning to more flexible forms of advertising like digital marketing instead of long-established mediums like television or print ads. With stock inventories low, brands don’t want to advertise products that aren’t available.
Supply chain issues are not going away anytime soon, so retailers need to be more proactive and sustainable in their approach to retail media and digital ad revenue. To retain their market share and keep digital giants like Amazon and third-party platforms away from marketers’ wallets, retailers and grocers must invest in digital relationships with customers and brand partners.
Three Steps To Capture Ad Revenue
By helping your brand partners provide shoppers with a more personalized and targeted experience, you can boost digital ad revenue and create lasting digital relationships. To recapture your share of the market, you need to:
Own the customer journey
Instead of leveraging third-party vendors like Instacart or Shipt, take control of your narrative and completely own digital relationships with customers. With third-party services, you not only lose digital ad dollars but also risk the opportunity to gain customer loyalty and valuable first-party data. By investing in your own retail platform and media network, you (the grocer) can own the customer journey and generate new digital advertising spend, not Instacart. With greater control, your brand partners can create personalized ads to encourage deeper engagement from consumers. Personalization also helps customers feel like their needs are being heard and met by their favorite brands and retailers.
Use targeted ads to influence purchasing patterns
By giving brands access to first-party data, you can help personalize customers’ shopping experiences based on their purchasing patterns. And with rich brand content, you can influence shoppers’ behaviors and drive in-store purchases by serving tailored retail media units that combine pricing, promotion and coupon strategies. Personalized experiences and relevant ads are especially important during supply chain disruptions and limited inventory challenges. For example, if the item a customer is searching for is out of stock, targeted, sponsored ads can be used to organically pivot customers toward a different but similar product that is available. With an AI-powered platform, you can funnel traffic to your site by placing offline ads on a competitor’s site at the most opportune time (i.e., when a consumer is searching for a preferred product) or while consumers are doing other digital tasks (i.e., checking the weather). Personalized, high-quality content can help boost sales, capture ad revenue and ensure customers don’t leave empty-handed, especially during stock shortages.
Offer seamless omnichannel experiences
With inflation and current shipping issues making online shopping more challenging, the in-store shopping experience provides increased value. Consumers expect convenient interactions wherever they prefer to shop. Not only can you help brands offer more than just a digital experience, but you can also help them integrate in-store and online experiences for seamless consumer touchpoints. Digitally connected experiences can grow brands’ customer bases and increase basket size. For example, some grocery shoppers may want to start their shopping from home but finish in the store. With digital solutions and data insights, customers can check what’s in stock before visiting the store. Your brand partners can also use this opportunity to send them ads and deals tailored to their online behaviors, motivating them to pick up even more items during in-store shopping. To capture a greater share of the wallet, you need to deliver the right message with the right offer for specific shoppers, and that process starts with access to the right data to unlock these insights.
See More: The Shift To Programmatic CTV: Why Healthcare Marketers Need To Go All-In To Grow
The supply chain crisis has left many brands scrambling to adjust their advertising budgets. While digital giants and third parties pose a threat to digital ad revenue in the wake of slashed budgets, you can help your brand partners by taking control of the customer journey and providing seamless, personalized experiences.
How are you making sure that bigger players do not capture your ad revenue share during the supply chain crisis? Let’s talk.
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By Karen Ho, Co-Founder & VP Mobile Engineering at Swiftly
