Retail media is exploding. One in every six pounds spent on digital ads globally in 2021 went to retail media (eMarketer). Brands are expected to spend £2.4 billion on retail media in the U.K. by 2024 (GroupM).
Why is retail media so hot? Because using digital ads on retailer websites is like having a gondola end in a brick-and-mortar store. It’s eye-grabbing and meant to engage shoppers along the path to purchase from awareness to consideration to conversion. Profitero’s research finds that brands moving into a top 10 spot on Page 1 using paid sponsorship see a 19% sales lift, on average. Paid ads also influence organic results, according to other industry studies.
But one size doesn’t fit all. What brands can do in terms of digital advertising — e.g., sponsored products, banner ads, video ads, etc. — varies by retailer and whether or not a retailer has its own retail media network. In this blog, we highlight the retail media / digital advertising capabilities of 6 highly trafficked eCommerce sites in the U.K.: Amazon, Argos, John Lewis, Ocado, Sainsbury’s and Tesco.
One quick observation: There are generally fewer ways to grab shopper attention via ads on these U.K. websites compared with leading U.S. retailer sites (see our U.S. retail media cheat sheet). This underscores how important it is that brands take advantage of what is available, and test & learn in other markets (like the U.S.) so you’re ready when additional capabilities roll out.
A quick look at the different Retail Media | Digital Ad capabilities supported by retailer websites
Source: Profitero
|
Amazon (1P) |
Argos |
John Lewis |
Ocado |
Sainsbury's |
Tesco |
|
|
Buy sponsored ads to rank higher in search |
Y |
Y |
N |
Y |
Y |
Y |
|
Buy display ads above or to the side of search results |
Y |
Y |
N |
Y |
N |
Y |
|
Buy video ads in search results |
Y |
N |
N |
N |
N |
N |
|
Buy editorial reviews in search results |
N |
N |
N |
N |
N |
N |
|
Buy ads on a competitor's product detail page |
Y |
N |
N |
Y |
Y |
N |
|
Conquest a competitor's brand keywords |
Y |
Y |
N |
N |
N |
N |
|
Sponsor livestream events |
N |
N |
N |
N |
N |
N |
|
Buy retargeting ads on other 3rd party sites |
Y |
Y |
Y |
Y |
Y |
Y |
Let’s dig in deeper, highlighting some examples of what brands can / can’t do with digital advertising on these websites. We’ll also offer some pro tips as you think about your digital retail media strategy and execution.
Amazon Advertising, the retailer’s retail media arm, has become a large and fast-growing revenue stream for the company. So much so that Amazon is steadily gaining ad revenue share versus the likes of Google and Facebook. Amazon’s digital ad revenue was forecast to have grown by 55% in 2021, (eMarketer). With search representing 70.5% of ad revenue for Amazon, it’s a good idea to allocate a portion of your Amazon ad budget to paid search to (1) get found; and (2) amplify your product content to maximise conversion potential. You also gain access to the following types of data from Amazon to monitor and optimise your ad campaigns: impressions, click-through-rate, new-to-brand customers, traffic to your Brand Store, and more.
PRO TIPS:
Optimise paid search campaigns — sponsored products, banner ads, etc. — by choosing target keywords that align with Amazon search trends. Profitero conducts a lot of Amazon keyword research on the U.K. market — check out this example. (Follow Profitero on LinkedIn for our latest research updates.)
Having a strong defensive strategy on Amazon is crucial. You need to own your own brand keywords or someone else will. But don’t forget: Turnabout is fair play. Watch for opportunities to conquest a competitor’s keywords too. Even better, buy ads on their product pages and sponsor feature spots on the PDP under the “Products related to this item” section. Amazon is one of only a handful of sites where you can conquest another brand’s keyword in search results.
Take advantage of sponsored video ads on Amazon SERPs; Case study: Barilla saw a 3x higher click-through rate using video ads in Amazon search results, compared with static ads (sponsored brands and sponsored products), when it was trying to raise awareness for its new legume pastas.
PRO TIP: Sponsor products and brands for relevant and trending keywords on Amazon
PRO TIP: Defend your brand keywords on Amazon or risk competitors conquesting them
PRO TIP: Use sponsored video ads on Amazon SERPs to drive higher traffic
PRO TIP: Buy sponsored display ads on competitor PDPs on Amazon
What brands can do on Argos’ website typically follows suit with parent company Sainsbury’s capabilities. Starting in 2020, digital ad capabilities tied to near real-time reporting mechanisms became a reality when Sainsbury’s-owned loyalty, insights and media services agency Nectar360 launched a retail media network — dubbed Nectar360 E-commerce Media Platform — leveraging CitrusAd technology. For brands, this means going beyond running sponsored product campaigns and buying display ads to also having access to ROI analytics, making it possible to change or optimise campaigns mid-flight as needed.
PRO TIPS:
Take advantage of Argos ad solutions, which means:
Sponsor products for relevant and trending keywords so you show up higher in search results
Buy banner ads at the top of the search results page on Argos
Defend your brand keywords so a competitor can’t conquest them
Leverage real-time ROI reporting provided by the Nectar360 platform for test & learns, scaling up what works and discontinuing what doesn’t.
Add a brand store on Argos — because consumers automatically get routed to your brand store when they search for your brand.
PRO TIP: Buy banner ads and sponsored product ads for relevant keywords on Argos
PRO TIP: Own your brand keywords on Argos or risk competitors conquesting them
PRO TIP: Set up a brand store on Argos because shoppers searching by brand keyword get directed there
Compared with other retailers studied, John Lewis is behind in terms of retail media capabilities. Currently, the site doesn’t offer brands the opportunity to buy ads or sponsor products on its website. (Subscribe to receive Profitero updates, since we continually monitor and report on evolving capabilities across retailer websites.)
PRO TIPS:
Make sure your product content is complete and compelling because the only way to rank on John Lewis is to do it organically. This is critical when there are few opportunities to influence discoverability and findability via paid search.
Check out our SEO research on John Lewis’ algorithm so you can optimise your product content to meet or exceed benchmarks.
PRO TIP: Optimise product content for organic search on John Lewis
PRO TIP: Tag products according to the retailer’s site taxonomy since John Lewis prominently displays filters at the top of category pages
Ocado Retail launched its retail media network in summer 2021, with a full rollout anticipated to take 12-18 months. Like several of its retail counterparts (e.g., Sainsbury’s and Argos), Ocado also uses CitrusAd’s technology platform. The two companies are working together to make it easier for brands and their media agencies to plan, buy and optimise media campaigns. Initial results are encouraging reports Ad Tech Daily. Small brands, which were part of the initial rollout phase are seeing average ROAS of 300-400%.
PRO TIPS:
Leverage Ocado’s new self-service retail media platform when it becomes available to you to sponsor products and buy ads.
Use the platform’s real-time reporting dashboards to optimise media campaigns and run test & learns.
Personalise ads using Ocado’s retail media platform to create a better customer experience.
PRO TIP: Buy display ads to appear at the top or side on search results page on Ocado
PRO TIP: Buy sponsored display ads on other brands’ PDPs on Ocado
Sainsbury’s-owned loyalty, insights and media services agency Nectar360 launched a retail media network in 2020 using CitrusAd technology. While brands have been able to buy display ads and sponsor products via paid search on Sainsbury’s site for some time, the Nectar360 E-commerce Media Platform also gives brands access to real-time reporting dashboards, enabling them to quickly adjust campaigns as needed. The availability of ROI analytics is a game changer too when conducting test & learns.
PRO TIPS:
Buy display ads and sponsored product ads to rank higher on Sainsbury’s SERPs.
Buy ads on competitor or complementary PDPs on Sainsburys.
Promote to get in Sainsbury’s shopper trolleys early so your products are listed under “Favourites” when shoppers are ready to purchase again.
Leverage data & analytics from Nectar360 E-commerce Media Platform to conduct test & learns.
Allocate media spend to the Nectar360 E-commerce Media Platform, and include it in your Sainsbury’s JBP.
PRO TIP: Buy sponsored ads so your hero SKUs place high in search results on Sainsbury’s
PRO TIP: Buy display ads on competitor or complementary brands’ PDPs on Sainsbury’s
PRO TIP: Promote to get into Sainsbury’s trolley early so you get added to “Favourites” list
Sponsoring products to rank higher in search results and buying display ads on SERPs have been the cornerstone of Tesco digital ad capabilities offered to brands. The launch of “Tesco Media and Insight, powered by dunnhumby” this past November now enables brands to do so much more in terms of consumer targeting and personalised ads. In a Tesco press release, Chief Customer Officer Alessandra Bellini states: “Our new platform will bring together the wealth of customer knowledge we have, with the insights from dunnhumby, and use it in a way that helps our brands to be more efficient and targeted and ultimately to serve our customers better.”
Importantly, the new platform also offers closed loop measurement, giving brands the ability to better measure their return on ad spend. Tesco has reported that advertising on Tesco Media gives brands an average ROAS of £6.60 versus an average ROAS of £3.80 on other channels. This kind of stat underscores how important it is that brands have a sound retail media strategy in place at Tesco.
PRO TIPS:
Use paid search and display ads on Tesco SERPs.
Leverage Tesco Media and Insight for test & learn opportunities to understand what types of digital advertising delivers the highest ROAS and ROI.
Use Tesco Clubcard member data & insights from Tesco Media and Insight, powered by dunnhumby to personalise ads based on past purchase behaviour.
Allocate media spend to the new platform, building out initiatives as part of Tesco JBPs.
PRO TIP: Use paid search to appear higher in search results on Tesco
PRO TIP: Help shoppers discover additional products in your portfolio by advertising on popular SERPs on Tesco
PRO TIP: Use sponsored product and display ads to own the SERP for trending keywords on Tesco
PRO TIP: Align ad spend to Tesco’s seasonal calendar
Identify and prioritise your target keywords. While it may seem intuitive, this is a critical step for brands just starting to operationalise paid search capabilities as well as veterans who’ve been at it for a while. Ask yourself: Are we winning all the keywords that matter in our category? This is important because our research shows that optimizing for relevant, high-frequency keywords gets you 2X the sales lift as low-frequency keywords. Thus, you should regularly monitor search frequency and volumes to align your keywords — for both organic and paid sponsorship — with the most frequently searched terms.
Keep ad spend flexible to move budgets around easily as needed. The importance of budget fluidity in the fast-paced digital world cannot be overstated. This is especially true when new keywords or competitors start trending in your categories and you want to optimise your ad campaigns around those trends. Keeping your ad spend flexible will allow you to adjust your paid search strategies as needed to focus on the highest ROI terms.
Make sure products you sponsor are ready to shine. This means having best-in-class product content, positive ratings & reviews, and a solid in-stock position (i.e., your products are available). There’s nothing worse than wasted ad spend, throwing money at items that have sub-par content to convert or are out of stock, or having your brand keywords conquested by a competitor when you’re out of stock.
Know which products convert best to get higher returns from your ad targeting. Profitero analysis has shown that about 60% of sponsored products have suboptimal conversion rates. So, we believe there’s a big opportunity for brands to improve the efficiency of their ad spend, prioritizing opportunities where you’re likely to get the biggest bang for your buck. Using a framework like Profitero’s Traffic & Conversion (T&C) matrix can help identify your unsung heroes — i.e., high-converting products in your portfolio that already have great content but are ripe for increased optimization activity to improve search placement and drive up glance views.
Make the most of your retail media budget. It’s good to know which of your products already rank high in organic (and paid) search by routinely monitoring and benchmarking your share of Page 1 and share of voice vis-a-vis competitors. You can do this by leveraging insights from your retailers’ first-party data along with a digital shelf tool that gives you a view into your competitors’ placement. This way you can be as efficient as possible with your ad budget, pulling back ad spending on highly ranked products and instead reallocating budget elsewhere.
| Contact us to learn more about how Profitero’s insights can help you optimise your search placement across different retailer sites. |