As we enter the final stretch of the 2023 Q4 holiday season, let’s reflect on whether the shopping ad strategy for your clients was the best it could have been and start to think about a plan for 2024.

According to GroupM’s global mid-year forecast, retail ad networks are expected to grow around 10% this year to hit US$125.7 billion.

What are shopping ads?

A shopping ad, also known as a product listing ad (PLA), is a type of online advertising that displays product images, prices, and other relevant information directly within a display or banner ad. They are also part of connected TV (CTV) ads or on other online platforms. Businesses commonly use e-commerce ads to promote their products and drive traffic to their online stores.

The key make-up of one of these PLAs or shopping ads is the integration of a product feed of some sort. For example, a Shopify feed, Walmart Connect API, Best Buy API, or something from your local merchants. Product feeds can easily be set up for your client’s catalogues using different feed systems, such as Channable and DataFeedWatch.

According to Insider Intelligence, the top channel for bolstering growth in the U.S. market has been through shopping ads and retail ad networks with an expectation that retail media ad spending will double between 2023 and 2027, reaching more than US$109 billion.

What news publishers can do

First and foremost, if you do not have a PLA/shopping ad as part of your line-up to sell, this would be a great time to add one to your advertising formats and sales strategy. The relationships you have with your local advertisers should support excitement about bringing their listings directly into your properties as part of a distribution strategy for them. It also beefs up content and relevance for your readers.

With the depreciation of the third-party cookie, news publishers should also think about a first-party data strategy that would be paramount to building your PLA/shopping ad strategy for your clients. In understanding how that first-party data can efficiently be used, there are several key points to consider:

• Personalisation: First-party data allows advertisers to create highly personalised shopping experiences for their customers.
• Targeted advertising: With first-party data, you can create more targeted and relevant advertising campaigns based on the location, time of day, weather, or even key segments of your news publication.
• Retargeting: First-party data is crucial for retargeting campaigns. If a customer has visited your Web site and viewed certain products, but didn’t make a purchase, you can use first-party data to retarget them with specific ads showcasing the products they showed interest in.
• Improved ad return on investment (ROI): This is a key piece to determining the right kind of shopping ad system you want to put in place. Targeting the right audience with relevant products increases the chances of conversion, leading to a higher ROI for your advertising efforts. This is especially important in the competitive landscape of online shopping.

Improved ad ROI and the type of shopping ad

Return on ad spend (ROAS) or improved ad ROI are important measures of effectiveness for you to sell shoppable ads. A good ROAS would be about five to seven times that of the ad spend.

Here is a simple calculation for you and your clients:
ROAS = revenue / (ad impressions ÷ 1,000) × CPM

• Revenue = the total revenue generated from the digital advertising campaign.
• Ad impressions = the total number of ad impressions delivered.
• CPM = cost per mille, which is the cost of 1,000 ad impressions.

It’s important to note that ROAS is typically expressed as a ratio or percentage. For example, if you generated US$5,000 in revenue from a campaign with a US$1,000 ad spend, the ROAS would be 5, indicating that you earned US$5 for every US$1 spent on advertising.

As part of this process, you should consider these three types of ads:

• Click-out shopping ads: These types of shopping ads drive traffic away from your site to your client’s pages. When users click on the call-to-action button, they are driven to the product on the retailer page.
• In-page shopping ads: This is a common strategy for many publishers. It is building a shoppable experience within your page content, a continuation of many of the affiliate systems of embedding shoppable call-to-action buttons, and the cart within the editorial content.
• In-ad shopping ads: This is an exciting new approach that is emerging and going to be big in 2024. It offers the ability for consumers to buy directly in the ad itself.

The key advantage of both the in-page shopping ads and the in-ad shopping ad is that the consumer does not leave the page experience and can purchase directly on the publisher’s site. This makes for a more efficient and engaging experience for the shopper as well as the new publisher. The integrated PLA/shoppable ad strategy can bring commerce into the overall content experience as well as drive revenue as we enter 2024.

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