Can retailers win with third-party ads?

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Intent Media’s Rob Schmultz (right), discusses third-party advertising strategies with Robert W. Baird & Co’s Colin Sebastian, ChannelAdvisor’s Scot Wingo, and Expedia Media Solutions’ Derek Netelenbos.

It can be a divisive internal question. But as Channel Advisor’s Scot Wingo pointedly said in Shop.org’s Revenue Beyond Retail First Look session at Retail’s BIG Show, it’s a proposition more retailers are considering.

Wingo was joined by Expedia Media Solution’s Senior Director for Global Ad Sales Derek Netelenbos and Robert W. Baird & Co.’s Colin Sebastian to discuss this emerging trend. The unparalleled success of Amazon has been a hot topic across the entire show, and it’s because the stats are hard to ignore. Panel moderator Rob Schmults laid the foundation for discussion with an alluring stat: Analysis by Forrester and comScore revealed that more shoppers are starting their searches on Amazon than Google. A takeaway? Amazon’s customer-centric model – which includes features like Amazon Marketplace, cloud services, and third-party advertising methods – is working.

Expedia’s Netelnbos shared a few ways their brand has had early success with third-party ads. The travel site was created as a merchandising opportunity for booking hotel and airfare. But the digital landscape has changed, and their partners gave feedback and wanted more. Expedia responded by implementing an ad server, Netelenbos said, and now the business extends to outside advertisers beyond travel to reach more audiences. The investment in external advertising has been substantial – to the tune of $1.5 billion last year. It’s an accommodation and response to what the customers wants, and Expedia has seen positive results.

Questions from the audience hit on what many were left wondering: Should businesses be wary about funding competitors through ads? Wingo used two pithy phrases to answer. Amazon in many respects can be considered a “frien-emy” for retailers, and the “FOA” (or fear of Amazon) is understandable. But with 188 million users on AmazonLocal alone, the opportunities to reach an audience your business wants to target are right in front of you.

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