While the social network isn’t doing away with its direct-sale initiative, it is focusing its attention on ads that drive consumers to retailers’ sites.
Toyota, Kellogg’s and Ghirardelli dance with the likes of Target, Sears and Overstock.
Once shunned by online retailers, ads by big brands are starting to appear on retailers’ web pages. And the ads are personalized to shoppers.
One advertising program, enRich for Brands from personalization technology provider RichRelevance Inc., lets brands buy display and other forms of ads that can appear on several pages of a participating retail site alongside related product recommendations. The ads, which generally cost about $30 per thousand viewers, appear on pages that contain content that complement what an ad is selling, says Jake Bailey, chief evangelist for RichRelevance. A display ad by Toyota, for example, features the Toyota Highlander sport utility vehicle in a display ad adjacent to a section of recommended car seats on Overstock.com. RichRelevance has signed up retailers including Target Corp., Sears Holdings Corp. and Overstock.com Inc., and is talks with several more, Bailey says. More than 35 brands are running ads, including Universal Studios, Colgate-Palmolive, Kellogg’s, Ghirardelli and Toyota Motor Co.
The enRich for Brands system uses the RichRelevance recommendation engine to determine the best place to have ads appear, such as where they are most likely to be viewed by interested shoppers likely to purchase what’s being advertised. “Ad placement is based on relevance, so advertisers aren’t bidding against each other,” Bailey says. Although competing brands could appear within the same product category, he adds, the enRich for Brands system is designed to make the most relevant ad appear for any particular list of recommended products.
RichRelevance shares the ad revenue with the participating retailers hosting the ads.
Advertisers can choose to have their ads placed in particular product categories, and they can also request to have their ad content wrapped around a product recommendation. They can also run video ads and advertisements that can drop down from an advertising bar to reveal a display ad. The Toyota Highlander ad on Overstock, for example, wraps around the section of recommended car seats. A bar across the top of the section says, “Presented by the stylish new 2011 Toyota Highlander.” And a color-coordinated bar at the bottom of the section entices viewers to click to view the drop-down display ad which also features a clickable video about the Highlander.
Advertisers can also choose to have their ads appear before shoppers based on criteria such as search terms shoppers used, the geo-location of their IP address and their past shopping behavior.
A key part of the advertising strategy underlining the enRich for Brands program, Bailey says, is to give advertisers the chance to reach consumers near or at the point of purchase on a retail site—or the bottom of the advertising funnel, as advertisers put it. “A lot of brands spend advertising money at the top of the funnel, but they’re working down to the bottom of the funnel,” says Bailey, who is a former marketing executive at Overstock.com Inc.
RichRelevance notes that one brand advertiser, which it declines to name publicly, has increased its ad spend on retail sites by 200% since joining the enRich program. It also notes that one recent ad campaign produced a 4.9% overall engagement rate, which RichRelevance defines as a combination of clicks on the ad and the related product recommendation.
Target, Sears and Overstock are No.’s 21, 8 and 28, respectively, in the Internet Retailer Top 500 Guide. Patel Parvez, director of online marketing for Sears, will speak at the Internet Retailer Conference & Exhibition 2011 in a session titled “How I found my best keywords.”