Twenty years ago, the idea of e-commerce was barely a blip on the horizon of the internet. Amazon was brand new and still finding its footing and few competitors had a foothold in the space.
Today, however, the world is very different. With over half of customers choosing the internet as a primary resource for shopping and new e-commerce companies launching every day, the market is large and extremely competitive. The industry is constantly evolving as well – with a rise in digitalization and changing customer demands and expectations, e-commerce companies need to be agile and creative in order to stay ahead of the curve.
Most e-commerce companies rely on the sale of products to drive revenue, but advertising management can also be a compelling opportunity. As an industry that collects an enormous amount of customer data, many e-commerce companies can add significant value in generating advertising revenue from effective targeted ads with little effect on day-to-day workloads, by employing the correct systems. For companies willing to meet this challenge head-on, it’s possible to generate revenue above and beyond sales alone by leveraging the abundance of customer data gathered in the everyday activities of your core business. However, there are some potential roadblocks that should be considered.
1. Establishing A Comprehensive View of Your Customers
E-commerce outlets cultivate a lot of customer data, but it’s not always easy to piece together a 360-degree view of what the customer journey entails. Bringing together all of your customer data in a way that speaks to what will resonate with advertisers who are attempting to communicate with your pool of customers isn’t always easy. Attempting to do this manually can be a real challenge, both in terms of time and accuracy.
Keeping a consistent message for your customers across all touchpoints in the modern customer journey can be a daunting challenge. With today’s “blended retail” approach to a customer’s purchasing behavior, there is a need for advertisers to catch the attention of their customers with highly targeted digital ads that resonate at just the right point along the buying journey. E-commerce outlets can gather valuable insights into customers’ online buying patterns and interests including when and how customers like to buy in particular, but also, how much time was spent researching by the customer and how they went about this?
Advertisers can leverage this data to better communicate with their target audience which is where things can get profitable for e-commerce outlets, once you have a system in place to reduce the manual effort associated with monetizing this data, the incoming advertising revenue will be worth the short-term investment in time and focus.
2. Managing Increased Operational Costs
By engaging in advertising sales activities, e-commerce companies are afforded the opportunity to diversify revenue streams and increase their overall profitability. However, this is a difficult balancing act, especially in an industry where operational costs must be closely managed to avoid eating into your own profits.
Adding an extra dimension to your business requires more time, and that means inflated operational costs. Taking time to implement new processes and collect and utilize data takes away from existing duties, leading to more work for – hopefully – more reward, but this isn’t always the case without taking an innovative path. Employing process automation in this arena can make a significant difference, however, the main priority is providing a way to streamline data collection and management in a cost-effective and timely manner so that your advertising activities do not distract you from your core business.
3. Data Management Across Multiple Solutions
Most e-commerce platforms utilize a variety of tools, from point of sale systems to customer relationship management, or CRM, programs. To properly utilize customer data for targeted advertising, these systems need to be brought together to maximize efficiency – a possibility that can take a long time without the right support system. With the advertising-specific software tools available today, it’s possible to pull together data across all third-party solutions to capture valuable customer data across all touchpoints.
4. Advertising Inventory Management
Managing inventory across multiple channels and marketplaces can be a stressful process, requiring time and attention to detail that many companies struggle to manage effectively. Inventory management issues can damage the reputation of your online outlet and cause upset with customers. When you don’t have the manpower to handle this kind of task without assistance, artificial intelligence and automation can do the heavy lifting by linking together with your inventory management systems without any additional manual effort. This can allow you to manage all aspects of your process, guaranteeing you know exactly how much of an ad load you can accommodate at any given time, providing an additional way to maximize your advertising revenue streams.
5. Handling Multiple and International Suppliers
Supplier management can be a complex process, particularly when suppliers operate across state or international lines. Managing these relationships is a large commitment when multiple areas of the market are involved, without built-in platforms to best approach communication. Advertising sales operations will add another pool of partners and clients that need to be closely managed to ensure prosperous relationships. Most e-commerce sites will not have this kind of capability as standard built into their existing systems, creating a logistical hurdle, but the ideal management solutions can mitigate this stress, resulting in a smooth, supported way to stay connected, while streamlining processes across your entire business.
By incorporating an advertising management solution, e-commerce sites will avoid incurring additional costs such as paying multiple international suppliers allowing them to place a greater proportion of budget and attention on maximizing their advertising revenue.
6. Complete End-to-End Approach
End-to-end in the marketing world refers to the management of the advertising process from start to finish, from concept to execution. A preferred approach for many agencies, end-to-end advertising isn’t something that can easily be accommodated for those new to the advertising realm. However, many automation solutions can accommodate the changing state of the market, providing support that can manage the ad sales and placement process, regardless of industry or area of expertise.
7. Continually Evolving Digital Landscape
As all e-commerce companies know, the digital world is constantly innovating and adjusting to meet the latest needs and behaviors of consumers. Entering the advertising market requires staying up to date on evolving trends in digital marketing. It is important to remember that as advertising management may not be your core expertise, without making time to research developments, it’s likely that you will lose a competitive edge. Automated resources can mitigate this, however; with tools that provide regular updates that align with the changing state of the market, it’s possible to ensure no stone is left unturned.
Understanding Challenges is Essential to Maximize Advertising Revenue
Delving into advertising isn’t the right choice for all e-commerce operations, but those willing to take a chance of alternate revenue streams and go about it with the right attitude can help to take their entire business to the next level. While it’s never easy to branch out into a new area – and for most e-commerce business owners, digital advertising is indeed a new approach to generating revenue – but the right support can make all the difference in overcoming pain points and in return, maximizing advertising revenue. Employing an end-to-end advertising solution can improve the ways in which e-commerce businesses approach advertising, offering a clean, efficient, and effective way to boost overall company revenue without significantly driving costs.