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Guest comment: Can advertising prop up online retail growth this Xmas?

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Dec 01, 2008

With online retail sales faltering this Christmas, Rob Gay, MD at eType, looks at how retailer’s can use advertising to monetise their inventory.

As the economy becomes more unstable on a daily basis, shoppers are turning away from the High Street in a bid to keep costs down over the festive period.  Internet retailers aren’t suffering as badly but sales will inevitably be slower than usual this Christmas and digital market research specialist comScore has announced that online shopping figures are declining for the first time since it began measurement in 2001. However, an option open to online retailers is the opportunity to monetise their inventory as a supplement to their primary revenue stream.

 

In the event of an economic downturn brands seek formats that offer demonstrable results and will enable them to maximise ROI. Internet advertising offers instant and measurable data that allows advertisers to revise campaigns in real time. These incentives make online the natural choice for advertisers as the economic situation worsens.

 

Internet retailers can expect an influx of customers looking to make savings, however as consumers are looking for bargains this may not necessarily translate into instant profits. Display space on premium retail sites can offer a significant revenue opportunity, however putting this inventory in front of the right demographic for the site can prove more challenging.

 

From this perspective publishers should consider external representation through an online sales house to manage and sell inventory for their sites.  Working with a specialist offers the publisher the security that their inventory is in the hands of professionals and that they will be able to work with a broad enough range of advertisers to suit their audience.

 

Premium networks can offer online retailers a dedicated sales team to advise advertisers how to best engage with the individual website and thus build advertising revenue for the publisher. It can also manage a wider set of branding opportunities for advertisers than display and rich media ads, for example, site-specific campaigns, integrations and sponsorships can create maximum impact and align positive brand associations with the site.

 

With the news this week that both Woolworths and MFI are on the brink of bankruptcy, it seems likely that the current economic climate will finish off a number of established High Street names this Christmas. This does draw a line in the sand between the worlds of twentieth and twenty-first century retail. The flexibility and added revenue streams offered by online advertising provide an extra layer of security to internet retailers if used effectively.

 

By Rob Gay

Managing Director

eType

www.etype-europe.com

 

 

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