For Christmas: Blurring of Ads and E-Commerce

We are still trying to figure out the highest and best use of digital advertising, and there’s still a bifurcation between so-called “performance advertising” and the brand advertising for which publishers get higher CPMs. But one bifurcation that’s vanishing is the difference between an e-commerce site and a conventional publisher. Heretofore, conventional publishers ran ads, but didn’t have stores or buy buttons, and e-commerce sites were little more than catalogues and shopping carts.  This year may see changes in that status quo as brand advertisers hope to raise their Christmas sales by placing ads on digital marketplaces,  while publishers add buy now buttons to social platforms and news sites.

Although all of this is primarily done for the convenience of the consumer, it doesn’t hurt publishers and retailers either.

For digital marketplaces, the change means a chance to make more money to offset the cost of such must-haves as free shipping and returns.  As an example, Amazon for the nine months ended in 2015 reported an 18.4% increase in North American sales from its non-product sales businesses, which include  both advertising and cobranded credit card revenue. Partnering up with vendors using a form of co-op advertising hearkens back to the old days of supermarket print advertising, in which the cost of those color newspaper spreads was borne by a collection of vendors whose ads were featured in the weekly specials.

For publishers, allowing visitors to buy directly from their sites may not only result in increased advertising revenues for Q4, but also increased traffic. Twitter is rolling out a “buy now” button this Christmas, capitalizing on its popularity as a social platform. It has already put in place integrations with Shopify, Bigcommerce, and Demandware. The button will make it possible for retailers to offer products to consumers and let the purchase take place right within a tweet.

Driving some of this activity is the new generation of millennial moms, who are digitally savvy and willing to buy on mobile without even going into a store. For them, a buy now button is a huge time-saver in busy lives. 9 in 10  US millennial moms use smart phones, according to EMarketer, and  81% used their phones while actually in a store, mostly to search for better prices or product reviews. Most also downloaded mobile coupons. All  of this blurs the distinction between online and offline even further, providing both threats and opportunities for marketers unable to find customers in the “usual” places.