Unify organic search and paid ads to drive retail media success
Opinion
Retailers no longer need to decide between boosting ad revenue and protecting the customer experience. The CEO of Particular Audience says that by combining organic search and retail media into a single platform, they can drive real growth.
The retailer, the brand and the customer. The three corners of the retail media triangle, which numerous platforms and solutions hope to resolve into one neat advertising experience.
The only problem is that there is a fundamental flaw in how most retail media networks approach the task. This is because their methodology relies on serving paid ads to shoppers during the browsing experience at the cost of displaying personalised organic results, which probably serve the consumer better.
The result is a system in which the consumer’s shopping experience is weakened to attract advertising dollars from brands and advertisers.
Yet, the retail media space moves fast, and new, vertically integrated AI-native platforms are developing technologies that provide a more predictive, personalised shopping experience. These can unify organic search, retail media, and recommendation solutions into a single decision engine. The result? For the first time, retailers engaging customers can optimise for both relevance and revenue to drive growth. In short, they get the best of both worlds.
Retailers hindered by legacy thinking
For years, retail media has been one of the most buzzy topics in digital advertising. The space is expected to be worth over $300bn by 2030, accounting for approximately 20% of global ad revenue.
Therefore, it’s no surprise that retailers are looking to get in on the action by offering better customer experiences, presenting audiences with contextually relevant products at the right moment in their search.
Yet, they are being hindered by legacy thinking. Retailers still focus on the data they hold, rather than the personalised offers and recommendations they could use to serve their customers.
The result is that their sponsored listings are lumped above the organic search results that could better serve the consumer. The retailers sell a lot of ads, but at the cost of total conversions… which begin to stagnate.
This is why retailers need to look beyond operating siloed systems, in which ad dollars cannibalise organic sales, customer trust is eroded because they’re not served high-relevance products in search results, and short-term ad revenue is prioritised over long-term audience loyalty.
Unifying converging worlds
So how can retailers take their advertising to the next level, transforming them into potent growth machines?
The more you think about it, the stranger it seems that paid content and product-serving technologies operate independently of organic merchandising, personalisation, and discovery tools.
The reality is these worlds are converging. The answer is to employ a retail media platform that uses a single decision engine to optimise the customer experience while simultaneously appeasing the many stakeholders within its own business.
This allows a retailer to retain an excellent customer experience while maximising CTR and conversions. It also enables them to deliver outcomes on secondary business KPIs, such as overstocks, spoiled inventory, private label, margin priority, trade package commitments, and ad yield, to name a few.
The message is that a retailer no longer needs to choose between monetisation and customer experience. If they unify organic search and paid recommendation under a single, AI-native, transformer-based retail media platform that promotes hyper-personalisation, everyone is a winner.
Customers get better, faster, more personalised discovery experiences that are natural and non-obtrusive. Retailers can maximise ad yield without losing out on organic conversions. Brands can contextually reach shoppers where intent is highest.
How does it work in practice?
Imagine you’re shopping for a guitar. You go to a retailer’s website, type your search terms, hit enter and wait for the results to load. With traditional retail media, the advertising brand paying the most will have its ad unceremoniously dumped at the top of your search results.
This process lacks nuance and doesn’t take into account anything remotely personal about you —the purchaser —or your context. It doesn’t know whether you’ve filtered a specific price bracket or even whether you’re looking for an electric or acoustic guitar, for example.
Yet this is what a vertically integrated retail media platform that unifies organic and paid search into one solution is capable of. The technology understands consumer context and values multiple factors (including expected conversion probability and ad bid value) to produce search results that are relevant to the customer, even placing organic products above paid results.
In this way, the customer gets relevant search results, feels greater loyalty to the retailer, the advertising brand is exposed to a high-intent, contextually relevant audience (even if it doesn’t feature at the top), and the retailer makes an organic sale and benefits from ad revenue.
Retail media is now a channel with significant momentum; retailers must take notice. It operates in a unique place, at the intersection of customer experience and revenue opportunities.
But they must employ the right tools. Native-AI retail media platforms that are vertically integrated, emphasise hyper-personalisation for consumers, and unify organic and paid search under one roof. They’re best placed to show every shopper what they want, when they want it. In this way, retail media can transform sponsored listings into a real growth machine.
James Taylor is CEO and Founder at retail media platform Particular Audience