Are brands seeing a halo effect from ads on retailers’ online platforms?

Jan 08, 2021

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 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.

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?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

5 Comments on "Are brands seeing a halo effect from ads on retailers’ online platforms?"

Sort by:   newest | oldest | most voted
David Naumann
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
1 year 4 months ago

For products that are not purchased on a recurring basis, most consumers begin their shopping journey on marketplace platforms like Amazon or Target. Recent statistics have shown that 50 percent of product searches start on Amazon. Once consumers decide on the product that best fits their criteria including features and price point, they often end up buying it on the retailer’s website or offline. The research presented seems to make sense.

Gene Detroyer

This makes ultimate sense and is consistent with advertising research that has been ongoing for the past 50 years.

The effect of advertising has never been a one shot deal. It has always been cumulative no matter where the spark comes from.

Matthew Pavich

This does inherently make sense. The truth is that this approach probably works better for some brands and some retailers than others. The good news is that there are a lot of great promotional effectiveness analytics to help both parties understand whether or not their investments are generating the business results they hope to achieve. As always, the savviest retailers and brands make informed choices based on a combination of their industry expertise and advanced analytics. They monitor and they adjust accordingly.

Laura Davis-Taylor
Laura Davis-Taylor
Founder, Branded Ground
1 year 4 months ago

I agree with all the comments but would add that the clear and concise proof points that the marketing mix modeling established are critical regardless of media aperture or format. To me, this is they key point: “anecdotes and stories can only get internal partners to listen, you need evidence and data to secure buy-in for additional investment.”

In the words of a former P&G client, “we fund well what we measure well.” I’m hoping this is the new norm and that we finally, finally get the retailers on the bus that by sharing data — particularly in blind spots like store behavior — we can all win.

Ricardo Belmar

This should make sense to any marketer and advertiser as any advertising, in any medium, will have an impact on sales through other channels. It’s the collective advertising that makes the sale for most consumers. Plus, we’ve seen plenty of data showing that for any brand that opens a new store in a given zip code, e-commerce sales will go up in that same zip code. It’s about creating and keeping mindshare with consumers. Brands shouldn’t see spending ad dollars on Amazon’s platform as just being in support of Amazon marketplace sales – it should be part of your broader advertising mix!


Take Our Instant Poll

How would you rate the media spend benefits from digital platforms run by retailers beyond sales through the retailer’s e-commerce site itself?

View Results

Loading ... Loading ...