Are brands seeing a halo effect from ads on retailers’ online platforms?
Through a special arrangement, presented here for discussion, is a summary of Kiri Masters’ recent Forbes article. Kiri is founder of Bobsled Marketing, a digital agency that helps brands to grow their sales on Amazon, Walmart and Instacart.
As advertising dollars have shifted from traditional media to digital platforms run by retailers, consumer product brands have speculated that there is a “halo effect” happening — boosting sales far beyond the online retailers where the brand is advertising its products.
A new study from The Digital Shelf Institute, “The Full Revenue Impact of Retailer Ad Platforms,” found a favorable reach. Using insights and anonymized data from dozens of e-commerce and leading CPG brands, the study found:
Retail media spend with one retailer influences shoppers wherever they ultimately choose to make their purchases, including online and offline at other retailers. Both brands and retailers have measured up to a range of $7 to $11 spent in-store for every dollar spent online generated by retail media campaigns. Retailer media spend drives other incremental benefits like improving repeat purchases, goodwill of partners, and social validation.
It’s the offline sales growth in particular that vindicates the value of retail digital advertising platforms — something that many had suspected, but had not been validated across the industry. For one household cleaning brand, media mix modeling confirmed that for every $1 spent online as a result of Amazon.com advertising, $7 were spent offline. The analysis also confirmed that for every $1 spent online as a result of Walmart retail media advertising, $10 were spent offline.
Ad spend across retailers’ digital advertising platforms is growing, but the value has been hard to calculate because the investment for brands often sits between marketing and sales organizations.
“Brands will often hear from internal partners that retailer and marketplace media investments helped push an opportunity through with retailer partners or had an impact in brick and mortar sales. But anecdotes and stories can only get internal partners to listen, you need evidence and data to secure buy-in for additional investment,” said Wayne Duan, VP of e-commerce and digital commerce at Constellation Brands.
Mr. Duan says having the evidence of the halo effect in-hand can drive a better conversation about the appropriate investment in various retailer and marketplace advertising platforms.
- The Surprising Impact Of Retail Advertising Investment For Brands – Forbes
- New Digital Shelf Institute Study Reveals the Full Revenue Impact of Media Retail Investment for Brands – The Digital Shelf Institute/PRNewswire
- The Full Revenue Impact of Retailer Ad Platforms – The Digital Shelf Institute
DISCUSSION QUESTIONS: How convinced are you that a brand’s spend on a retailer’s online advertising platform packs benefits beyond that generated on the retailer e-commerce site itself? Does it make sense that in-store sales and sales at other retailers see notable benefits?