In this week’s guest member blog post, we hear from Gil Sadeh, President of Kenshoo Skai who shares how publishers and retailers can thrive within and across walled gardens. He reveals how to successfully navigate the complexities of modern digital advertising and scale growth, beyond offering inventory with rudimentary demand levers.
Advertising operates within a cycle driven by the basic economic principles of supply and demand. Publishers provide ad inventory, and advertisers invest in these platforms based on their effectiveness in driving consumer engagement and transactions. This demand for ad space perpetuates the cycle, particularly in digital walled gardens like Amazon, Google, and Facebook, where targeted consumer engagement meets sophisticated ad-delivery mechanisms.
As the digital ecosystem grows more complex, simply participating in this cycle is no longer adequate. Publishers and retailers must adopt advanced strategies to grow demand effectively within their gardens, evolving to help advertisers leverage these complexities to their advantage.
Build it and They Will Come?
Platforms like Amazon, Google, and Facebook, with their billions of monthly active users, have attracted massive advertiser demand. With over 50% of all online audiences now in cookieless environments, the reliance on first-party data makes these platforms particularly attractive for advertisers. The ‘big three’ account for over 60% of all digital ad spending — a number that continues to rise.
As ad budgets increasingly favour walled gardens, the supply side has experienced a renaissance. According to eMarketer, over 200 Retail Media Networks (RMNs) have been launched worldwide as of August 2024. New social platforms have joined the scene, and even non-traditional sectors (finance, travel, telco, delivery, etc.) are creating their own media networks, such as Chase, United Airlines, T-Mobile, Uber, and more.
But opening up supply isn’t enough. While initial novelty and access to new audiences brought with it advertiser budgets and quick wins for retailers, this advantage is fleeting. Many networks are already struggling to hit fill rates and maintain advertiser interest. With hundreds of competitors now in the field, the focus must shift from building and connecting supply to effectively growing and scaling demand.
The true challenge now lies in not just attracting advertiser interest, but also continuously enhancing the value provided. As the market matures, scaling demand requires incorporating advanced demand-capture capabilities and ongoing optimisation. Advertisers are increasingly sophisticated, seeking to use first-party data to create highly targeted campaigns and gain deeper insights into consumer behaviour. Therefore, platforms must evolve beyond offering basic ad space to deliver innovative solutions and advanced tools that meet these elevated expectations.
Looking Towards the Future: Data-Driven Demand Strategies
To successfully navigate the complexities of modern digital advertising and scale growth, platforms must go beyond offering inventory with rudimentary demand levers. Here are five key areas of focus:
1. Unification of Supply and Demand: This will streamline operations and drive sustainable growth by creating a more cohesive and efficient platform for managing media investments. Retailers must work towards providing seamless experiences where advertisers can easily access and optimise their campaigns across multiple touchpoints.
2. Omnichannel Integration: The expansion of retail media into commerce media and the formation of partnerships between walled gardens highlight the need for a robust omnichannel approach to enhance engagement and impact. This will allow advertisers to effectively reach consumers wherever they can be found while ensuring that marketing efforts are synchronised and effective, leading to better ROI.
3. Advanced Analytics and Insights: By leveraging comprehensive data beyond traditional ad metrics, these platforms will enable more effective optimisation and transparency, helping advertisers understand the true incremental value of their campaigns. Predictive analytics, machine learning, and AI will play pivotal roles in personalising content to drive higher engagement rates.
4. Enhanced Targeting and Personalisation: Platforms must utilise first-party data to create highly targeted campaigns that resonate with specific audience segments. By offering granular audience targeting options and dynamic creative optimisation, platforms can help advertisers achieve greater precision and relevance in their messaging.
5. Advanced Planning and Forecasting: While optimisation is often associated with managing ongoing campaigns, its application in campaign planning is equally vital for mastering demand in digital advertising. Integrating AI into campaign planning will streamline the process, enhance targeting accuracy, and better forecast demand shifts. This ensures that advertising strategies are proactive and responsive to market dynamics.
The New Currency
Clearly, the future of digital advertising is demand. But to realise that future, retailers, and publishers must act quickly to innovate and implement advanced, data-driven strategies in the present. Long-term success requires being able to span both walled gardens and the open web while removing complexity from these high-yield environments.
With the right solution, the better-positioned platforms will be able to capitalise on their investments to unlock and harness scaled and diversified ad demand across the multiple consumer touchpoints of commerce media.
