The opportunity for e-commerce firms to create revenue by selling ad space on their sites or apps to third-party marketers is sometimes ignored because these brands predominantly generate revenue through online transactions. Websites and applications for news, media, and gaming organisations, on the other hand, have embraced third-party advertising as a positive customer experience and revenue stream. Their success shows that e-commerce businesses who are sluggish to integrate third-party advertising are missing out on a chance to grow their revenue stream and connect with customers.
One of the most common reasons we hear from Asia-Pacific’s e-commerce firms for not running third-party ads is that they feel it will harm their primary business. They believe that this advertising will clutter the user interface, distract users from exploring or making a purchase, and drive people away from their shopping site, resulting in lost sales. However, according to some of the newest research, this is a myth that causes e-commerce businesses to miss out on revenue prospects.
Kantar Group, A Media Agency from London was asked to investigate how third-party ads affect the e-commerce consumer experience and how e-commerce firms in Asia-Pacific can better serve people in Brazil and the United States, which are significant export markets. The research also looked at how much prospective e-commerce businesses miss out on by not hosting third-party adverts.
People visit numerous online shopping sites before making a purchase, thus a shopping platform with third-party adverts can monetise traffic that does not convert into sales. Because 93 percent of online customers visit two or more shopping websites before making a purchase, and 91 percent visit a shopping website more than twice before checking out their online cart, the value of such visits can be significant. E-commerce sites are losing money by not monetizing these non-transactional visitors with third-party adverts.
Importantly, Kantar’s research reveals that third-party ads do not distract the online shoppers’ purchasing decisions or reduce conversion on e-commerce sites. The study, which compared participants who were exposed to third-party adverts on an e-commerce site to persons in a control group, found that user behaviour on the site is the same whether or not the site has ads.
The exposed and control groups spent about the same amount of time on the home and product pages, and there was no significant difference between them when it came to adding items to their shopping carts. This demonstrates that the presence or absence of third-party adverts has no direct impact on online shopping behaviour or a business’s ability to make a sale.
Studies also show that over 90% of individuals said they didn’t think there were too many commercials to distract them from browsing, and 85% of shoppers who did encounter ads said they didn’t have a bad buying experience as a result of them.
Third-party adverts on e-commerce platforms have proven to contribute to incremental business growth while also improving the user experience. HotDeals, an Asia Pacific based coupon website, for example, sold its ad space to diversify revenue and saw a 6.1X increase in new ad revenue year over year.
It used AdSense for content and AdSense for search to test interest-driven display ads and search ads. When people are actively searching for a product, it can give them the most relevant adverts. When people search for computer-related coupons, for example, they may get computer-related search advertising that is relevant to them. HotDeals greatly improved their third-party ad revenue by experimenting with multiple ad forms, with AdSense for search revenue topping AdSense for content by 90%.
E-commerce sites can benefit greatly from third-party advertising. Ad monetization has helped early adopters build their businesses and improve their customers’ online purchasing experiences. More e-commerce businesses can follow in their footsteps by testing and learning how to effortlessly integrate third-party adverts into their sites.
