The eCommerce Race is On: Programmatic Spend is Rising

When Jeff Bezos launched into space earlier this month, a seat on the rocket ship cost $27M. A staggering sum for most—but it’s just .0013% of what Amazon’s eCommerce business brought in for 2020.

Amazon is on pace to make up 50% of U.S. eCommerce market share this year, forcing tech companies to build up their eCommerce technologies.

At the same time, large online retailers are investing more in programmatic advertising.

The latest updates in eCommerce investments

North American online sales grew nearly 32% last year, according to eMarketer. With this massive shift, tech companies have been pouring money into building out their eCommerce integrations and solutions.

#1 Taboola acquired Connexity

Taboola, a leader in discovery and native advertising distribution, went public last month. Using this momentum, Taboola is investing more in eCommerce. It recently purchased Connexity, a marketing technology company that helps eCommerce brands reach shoppers using publisher and social influencer networks.

With this expansion into retail, Taboola will give brands another option to reach shoppers without advertising using the biggest tech companies (e.g. Google, Amazon, etc.)

#2 Twitter attempts to win over DTC brands

Though other social platforms already have their ad solutions dialed in, Twitter is not too far behind. It recently announced its new eCommerce ad features.

“Twitter has spent a lot of time thinking about new ad products around [shopping]” said Megan Jones, exec VP of media at Digitas to AdAge. “I am impressed with the audience extensions and third-party partners they brought in to enable shopping experiences.”

National brands are now experimenting with the updated carousel ad offering. Later this year, the social media platform will unveil more eCommerce integrations with Jebbit and VidMob.

#3 Google Offers New Integration With GoDaddy Web Stores

Earlier this month Google announced that GoDaddy online web stores could integrate their product listings across Google-owned sites for no additional cost.

Stores can now easily list their items across Search, Shopping, Image Search and YouTube.

Google is the first place most internet users in the U.S. go to search for a product. This is an exciting update for consumers, but even more for the online stores who’ll have a stronger way to reach more shoppers.

#4 Amazon Isn’t Giving Up Market Share Without a Fight

Amazon is now offering a new ‘brand referral bonus.” When brands run digital advertising campaigns that link to the product listing on Amazon, rather than another online store, they’ll give brands a bonus of about 10% of the product’s sale price.

“Amazon is one of the best places for brands to launch new products,” said Mike Miller, worldwide director of Amazon brand program and selling partner development. “We’re launching the Brand Referral Bonus to help brands make their marketing spend go further.”

As large retailers and tech companies ramp up their eCommerce game, Amazon is incentivizing small brands to drive traffic to the eCommerce giant.

MediaRadar Insights

The race to attract online shoppers is clearly on.

Amazon’s new referral program is just one of its strategies. The company is also investing heavily in programmatic. What are Amazon’s rivals up to in the programmatic space?

Methodology: We looked at: Alibaba, Amazon, Etsy, Google Shopping, SheIn, Target, WalMart, and Zulily to examine the change in programmatic ad buying over January – June, 2019 – 2020.

This year, these brands spent $282mm in programmatic advertising. This is up from $197.1mm in 2020 and $48.9mm in 2019.
Their increased ad presence indicates that though Google has threatened to remove access to third party tracking, this is still a very popular channel of advertising for these brands.

While Google Shopping, Amazon, Target, and Walmart have other channels to promote their presence, Alibaba, Etsy, SheIn, and Zulily are purely digital enterprises.

Their spending habits have decreased from 2020 to 2021. Alibaba, Etsy, SheIn, and Zulily spent $21.5mm in 2020, and $4.7mm in 2019.
Their current spend, $19.9mm, makes up only 7% of the group’s total.

Amazon, Target, Walmart, account for 93% of the rest of the spend, with Amazon spending the most in programmatic advertising.

Google Shopping accounts for less than 1% of all advertising spend within this group of companies. Because Google is the first point of discovery for most shoppers, there likely isn’t a need to advertise their eCommerce services.

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