Increasing traffic isn't the only way to boost on-site retail media ad revenues.
"Ad revenue is usually based on a combination of the bid times the traffic, which will then equal the revenue. And yet, when we look at some of the very big players in this space, we see a kind of different dynamic," Paul Dahill, managing director, sales EMEA, at Koddi, said in a recent webinar. "What can we learn in this retail media/commerce media space, from these kinds of players that could potentially be applied into what we're doing?... There's not one silver bullet."
Here are three strategies retailers can learn from big tech players to pump up on-site ad revenues.
US retail media ad spend will reach $62.35 billion in 2025, a growth of 20.0% from 2024, per our November forecast. It would benefit retailers to court as much of that spend as possible.
Retailers can do that by enhancing their existing data by thinking creatively about targeting. For example, offering the ability to a pair complimentary goods in consumers' baskets could entice advertisers to bid more aggressively.
Ask yourself, "Is my first-party data as sophisticated as it could be to really attract some of those incremental ad dollars into my system?" Dahill said.
However, there are an increasing number of retail media networks (RMNs) competing for a rapidly saturating ecosystem. In 2025, Amazon and Walmart combined will take in more than 84.0% of all retail media ad spending, per our November forecast.
"Every day you hear about a new retail media network launching," our analyst Sarah Marzano said on an episode of "Behind the Numbers." "I think we're just entering a world where I would caution any retailer or commerce-focused business from thinking that if they build it, advertisers will come. That is not the world that we're in."
To increase ad revenue, retailers can also consider increasing the number of ads on-site, particularly in a dynamic, targeted way.
"Depending on the context or the season that [consumers are] in at that time, there might be a different kind of ad experience," Dahill said. "If there is a particular holiday or event… there's likely an understanding from the consumers that this is a big event and there's going to be more of that kind of activity that's going on. So there's perhaps less sensitivity to ads at that point from the consumers' perspective."
On-site retail media ads dominate RMN budgets.
But retailers should be careful about ad overload, considering a majority of consumers can have negative reactions to ads.
Retailers should be creative and bold when thinking about how to court consumer engagement, particularly when it comes to personalizing experiences.
Ninety-one percent of global consumers said that personalized product recommendations based on their interests and past purchases are at least somewhat important when interacting with brands, according to the 2024 "Adobe Digital Trends" study.
Still, consumers can be wary of ads that are overly personalized, whether by geographic tracking, timing, or other perceived invasions of privacy.
"This isn't set it and forget it; keep experimenting, keep iterating," Dahill said. "The logic behind which ad to show to which individual can have a jump in ad engagement as much as 50%, and when you calculate that across your platform that can really make a significant difference."
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