Media Companies to Face Growing Competition from Retailers

It used to be so easy. Media companies provided the expertise and the format to help retailers reach the right customers and increase sales. Now more online retailers have decided they can earn an additional revenue stream besides selling goods and services directly from their sites. Some are creating a new form of co-​operative marketing.

A recent column by Jay Habegger at AdAge’s DigitalNext space describes how retailers are generating more revenue from on-​site ad sales. Retailers are selling space on their landing pages or product pages to manufacturers who often want to target the same customers the retailers sell to. The key strategy here is for retailers to place a cookie on a shopper’s browser and then continue to target that shopper across other sites. Seeing related ad impressions on those other sites may prompt the shopper to return and make a purchase. At the same time, the retailer can sell this data to other interested advertisers. Habegger notes that manufacturers will likely want to pay for information on retargeted consumers from retail partners. This data is considered more valuable than generic shopper data.

A couple of industry heavyweights, Amazon and Best Buy, are also exploring the sale of media impressions based on their customers' browsing history. Habegger speculates that this focus on building retailer audience networks has the power to become an “advertising tool unmatched by anything else online.” If this kind of model becomes widespread, media companies will have to compete even harder to sell inventory and valuable audience metrics to marketers.

[Habegger, Jay. Retailers are Creating Media Properties. DigitalNext. Adage​.com. 17 Oct. 2011. Web. 2 Nov. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.