More than ever, people are letting their fingers do the shopping. E-commerce adoption is at an all-time high. While consumers have been moving towards shopping from the comfort of their homes and phones for some time, it’s estimated that the COVID-19 pandemic accelerated the transition to online buying by at least five years. And, not surprisingly, ad spending has kept pace with this increased traffic: ad spend on e-commerce sites and apps grew nearly 50% in 2020, and will reach more than $40 billion by 2024.
As ad spending grows, the industry is investing in more compelling formats and higher quality ads that are complementary to your business and prioritize your shoppers’ experience. It’s true that less than 3% of site visitors wind up converting to a purchase. But you have an opportunity to monetize all those window shoppers, diversify your revenue streams and increase your product sales.The time is now to launch your own online ad business.
Self-propel growth by incorporating ads into your commerce business
The traditional customer journey begins when a shopper meets your brand and ends when they make a purchase. Your marketing dollar, distilled down through the sales funnel’s discovery, exploration, engagement, and purchase phases, ultimately leads to the purchase of your product or service. As commerce companies trade their funnel for a flywheel, keeping the customer at the center, it’s more important than ever to ensure a delightful and helpful shopping experience.
Consider how ads can accelerate your flywheel:
- You produce high-margin revenue by monetizing every online visit, including those that do not end with a purchase
- This revenue stream can fuel marketing, business innovation, an expanded digital footprint, regional growth and more
- All these investments create a better customer experience, strengthen advertiser relationships, and drive more sales
And the flywheel keeps spinning. You monetize your traffic and generate incremental income; brands sell more by reaching consumers as they make purchase decisions; shoppers learn about relevant products without having to provide more personal data. It’s a win-win-win for commerce companies, advertisers and customers alike.
Activate your first-party data to provide a relevant and privacy safe user experience
The growth in online shopping challenges ecommerce sites to offer better customer experiences while adhering to ever-changing privacy regulations. You can meet this moment by using your first-party data about customers’ past interactions with your site to create more relevant shopping experiences and show the right ads to the right consumers at the ideal time.
“By serving ads to their customers at relevant moments,” says a Forrester report, “commerce companies deliver a superior customer experience while also cultivating a rapidly growing new revenue stream with healthy margins.” And according to a joint study by Google and Boston Consulting Group (BCG), companies that offer a more relevant shopping experience earn customers who end up spending 40% more on purchases than they’d intended.
Relevant ads can be implemented in a thoughtful way that respects user privacy. As the industry adopts new, privacy-first approaches, you can ensure a positive and protected user experience by clearly identifying how customer data will be used and working with technology partners that can adapt with the evolving privacy landscape.
There are a number of considerations when looking to launch an ad business. Commerce companies need solutions that will scale with them and fit their unique needs. With Google products, you can tailor a strategy that works for your company, customers, and advertising partners. And with commerce media networks going mainstream, there’s never been a better time to embrace this opportunity.