Marketplaces that prioritize the success of their sellers can unlock a virtuous circle of growth. Integrating sponsored product ads is one way to enable this.
4 min read
If you have ever been to the main Souk in Marrakech, your senses will have experienced what a marketplace is all about. It is a vibrant, dynamic, buzzing stream of sellers, buyers, and strollers flowing through a large colorful area in a central location of a major city. The sounds, the scents, the colors, and the light will leave you with a memorable moment in your travels. Perhaps you recall a bargain you got. Marketplaces are attractive social constructs.
And in the 2020s, marketplaces are the hotspots of the internet too.
The inexorable rise of the online marketplace continued last year: according to Digital Commerce 360, in 2022, the top online marketplaces sold $3.25 trillion in goods. It’s not surprising, then, that more and more marketplaces are emerging.
An Attractive Business Model
The online marketplace model is attractive to customers because of that same dynamism you would find in a souk: there is an abundance of product offerings, there are special deals, and you are sure to find what you were looking for or discover something new. All you need to do is search for it or stroll around the categories to find your product.
We asked Diana Abebrese, Retail Media Principal at the integrated business and technology consulting firm EPAM Systems, why online marketplaces are dominating the retail space:
"The success of marketplaces can be explained by the convenience of one-stop shopping and next-day delivery. Customers respond well to the marketplace model"Diana Abebrese, Retail Media Principal, Business Consulting at EPAM.
And if shoppers enjoy marketplaces, there are many reasons why a marketplace model also makes sense for an online retailer looking for paths to growth. Marketplaces offer a wider range of products, provide competitive prices, attract more traffic, and are scalable with lower overheads.
Marketplace Challenges
It is difficult to imagine the infrastructure and personnel needed to keep a real-life marketplace such as a souk running. But for an online marketplace, the challenges can be wider and even more costly. An online marketplace setting up today will have to consider infrastructure and technology investments, including integrations and organizational change.
Meanwhile, marketplaces are faced with the ever-present question of how to recruit and retain sellers.
“Growing a seller base is a new discipline for retailers moving to a marketplace model”Diana Abebrese, Retail Media Principal, Business Consulting at EPAM.
A Retail Media Solution Can Enhance a Marketplace
To push success further, a marketplace can add more sellers and help existing sellers reach more customers with their offering. This is where retail media can help. Solutions such as sponsored products and sponsored display can provide greater visibility for sellers. This can increase seller loyalty and attract new merchants to the marketplace.
But integrating Retail Media in a marketplace can be complex. The headline requirements are easy to understand. First, the solution must be capable of generating advertising revenue for the marketplace. Secondly, the ads served must be hyper-relevant in order to protect the customer experience. Third, the platform has to be easy to use so the most inexperienced of sellers will adopt it. And finally, the flexibility to integrate and adapt to an existing technology stack is essential.
“Simplicity first and foremost. Whatever solution you choose must be very easy to use for advertisers”Blandine Multrier, Managing Director, Advertising Services at relevanC
Relevant Ads
Sponsored Product ads typically replace the top positions in a shopper’s search results, giving a seller’s product dramatically increased visibility and traffic. And when done right, ads are highly relevant to the customer’s search and will convert more readily than other ad formats. At a minimum, the ad is expected to perform at least as well as the organic result it is supplanting.
Ease of Use
It’s easy to forget that sellers on a marketplace are focused on selling. And they’re not necessarily marketing experts. The key to building adoption of sponsored products is to lower the barriers to entry that complex user interfaces can put up.
At relevanC, retail is at the heart of all products and solutions. The technology is there to support commerce. As Blandine Multrier explains:
“We’ve built a platform at relevanC that prioritizes ease of use for sellers. This is the bedrock of seller engagement in a self-serve retail media program”
Blandine Multrier, Managing Director, Advertising Services at relevanC
Building on relevanC’s philosophy is a major European online marketplace and early adopter of sponsored product advertising. The company wanted to encourage better uptake from sellers and saw an opportunity to do that through AI and automation. Replacing a well-known provider’s platform with relevanC’s second-generation retail media solution brought that opportunity. A seller that uses the AI-powered, 1-click ad creation tool removes the guesswork from building a successful campaign.
Blandine explains:
“Not all sellers have the expertise or the time to be able to pick the right strategy. The AI makes recommendations on the bid price and keywords, product targeting, and placements. And it’ll outperform an experienced marketer every time”
Blandine Multrier, Managing Director, Advertising Services at relevanC
Flexible Approach
Examples of failed in-house software development projects litter the annals of many large companies. Every IT department will tell you they can build a better and cheaper alternative to the off-the-shelf solution. The reality is that while a marketplace organization should focus on retail and not software development, no single platform will check all your boxes.
As Diana Abebrese puts it,
“Put your needs first rather than bending to the constraints of an off-the-shelf system, and ensure that whatever solution you choose, you can adapt to your requirements. The key is to create a fully-automated platform that can scale efficiently through workflow automations, business rules, and frameworks with a compelling and easy-to-buy self-service offering”.
Diana Abebrese, Retail Media Principal, Business Consulting at EPAM.
Diana makes the point that the chosen technology will need to interface with existing infrastructure. EPAM’s teams are well-positioned to help marry the new and the old:
“It’s important that a retailer seeks help from an integration partner that has marketplace and media know-how. At EPAM, we’ve become adept at bringing the two together”
Diana Abebrese, Retail Media Principal, Business Consulting at EPAM.
Marketplace Success = Seller Success = Retail Media Success
Online marketplaces have taken e-commerce by storm. The online experience doesn’t yet feel like a real-life marketplace like the souk of Marrakech, but it represents a compelling user experience for shoppers, a growth opportunity for sellers, and an expansion opportunity for retailers. Adding the right tools for monetization and integrating them with existing technology systems is a challenge for which solutions are already there, but keeping seller adoption and success at the core is key to making retail media.
EPAM helps enterprises reimagine their businesses through a digital lens. Their software engineering heritage combined with strategic business and innovation consulting, design thinking, and physical-digital capabilities provides real business value to customers through human-centric innovation.
With over 8 years of experience in retail media, Diana provides cross-functional strategy and support to EPAM’s global retail clients. She has extensive experience designing and deploying integrated retail media platforms and driving commercial transformations – working closely with retailers on requirements gathering, solution design, testing and GTM.
relevanC is an ad-tech SaaS provider. Its technology powers the Retail Media operations of retailers and marketplaces worldwide. Built from the ground up specifically for marketplaces, relevanC’s Sponsored Products platform allows retailers to generate new advertising revenue streams through hyper-relevant, personalized ads placed all along the customer buying journey. relevanC’s solution creates a virtuous circle that drives shopper satisfaction, marketplace GMV, seller growth, and high-margin advertising revenue for retailers and marketplaces. Founded in 2017, relevanC has offices in France, Brazil and Colombia and operates globally.
Blandine is the Managing Director of relevanC where she heads retail media advertising services. She has leveraged over 20 years’ experience in data and digital advertising to build and lead relevanC Retail Media networks in Brazil, Colombia and in France, through a JV with two main retailers: Groupe Casino and Intermarché.
