Online Retail Makes Marketers' Dreams Come True

NEW YORK — E-commerce wants to be marketing's new best friend. Online retail, although mostly thought of as a destination for customers to click "purchase" on the Web, holds greater opportunity for marketers than most think. "Retail online media is a great way to spend the same dollar twice," said Greg Murtagh, the chief executive of Triad Digital Media during a session at the recent Ad:Tech conference here. "You reach an important consumer while she's planning shopping trips and you build loyalty with retailers." With retailers such as Wal-Mart leading the way in letting advertisers enter the conversation with sponsored content, interactive ads, games, and even click-off microsites, retailers are becoming much more friendly to the advertising dollar -- and vice versa.

Murtagh delved into the concept of the "new normal" consumer. Such consumers are spending less money, but they are researching more online. It's not uncommon for an affluent customer to visit Wal-Mart.com in the morning then Saks Fifth Avenue in the afternoon. They are visiting e-commerce sites not just research future online purchase, but to look up information regarding in-store purchases, as well. Murtagh shared the following statistics: 

  • 41 percent of all brand decisions are made before a shopper hits the store.
  • Affluent consumers (those earning more than $75,000) report their store visits to mass merchants will grow 17 percent in 2010.
  • Consumers now say the number one reason to visit an ecommerce site is to learn. The number two is to buy.
  • According to a ComScore study that tracked online browsing, online advertising in CPG had a 9 percent lift versus 8 percent in television. 
  • Deloitte research shows that brands that employ shopper media programs are growing 50 percent faster than those that don't.

"The real story is the research component and how that is driving offline sales," Murtagh said. Web-influenced cross channel sales will amount to $1 trillion in 2011, which will be three times as much as just ecommerce sales. The emphasis with retail media marketing is on reaching the consumer when she's in "buy mode." Consumers aren't just going to ecommerce sites such as Best Buy and CVS to purchase products -- they are going there for information, in many ways as they would with an iVillage.com or AOL.com. When they are ready to buy, what a great opportunity for an advertiser to be the last message a consumer sees before she pays. "Media lines are blurring into a synergistic integrated approach," Murtagh told attendees before introducing his copresenter, an advertising executive from Wal-Mart. 

Many retailers made decision to build on ecommerce core by adding ability to reach consumers via ads on their site. Wal-Mart expanded to let anyone advertise -- not just suppliers. Now that the retail giant has opened the gates, financial services has emerged as a big advertising segment. 

Additionally, Wal-Mart offers more than the standard ad placements, said PK Van Deloo, the senior director of Walmart.com. Brands have opportunities to sponsor microsites, interactive games, or position themselves front and center on Wal-Mart's "In Stores Now" page. 

Wal-Mart's "In Stores Now" page serves another purpose in addition to allowing brands such as Proctor & Gamble display interactive ads and offer promotions. The destination unites online and in store efforts. "We know multi-channel shoppers are our most valuable customers," Van Deloo told attendees. The page has been phenomenally successful in terms of sponsored content, and it achieves high levels of engagement and a lot of click through rates.  

According to ComScore, Walmart.com saw 31 million unique visitors during the month of September, placing the site 25th among ComScore's list of the top 50 online destinations -- higher than content-specific sites such as ESPN and Gannett and even higher than Twitter. Van Deloo said that traffic typically spikes as the holiday season intensifies in November and December -- the number of unique visitors usually doubles -- and Walmart.com will probably jump as high as 15th on ComScore's list during those months. 

Wal-Mart has been working with online-retail advertisers for nearly five years, but Van Deloo says that interest has recently begun spreading to other verticals. At the start, marketing was most popular with packaged goods brands, beauty, and baby products. He said he imagines that will spread with verticals such as pharmaceuticals. "Why not put a brand advertisement on one of the largest pharmaceutical sites in the world? How much more contextual do you want to get?" he asked rhetorically.

Brian Leder, the vice president of digital with MediaVest offered the agency's perspective and drove home three points about why retail media matters:

  1. Direct access to consumers. A great example is a promotion Best Buy is running on washing machines on its site. Guess what company is appropriately sponsoring the page? Tide detergent.
  2. Scale. Just think about Wal-Mart's online presence. It's bringing a tremendous amount of consumers to its site each day.
  3. Bringing traditional marketing into the digital age. Here's a chance for online efforts to piggy-back off traditional retail store success.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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