1. Online shopping is increasing as consumers look for value and deals. However, motivations for shopping online vary by category, with frequent purchases like groceries motivated more by convenience and infrequent purchases of emotional goods motivated more by research. 2. Advertising can be highly impactful on e-commerce sites where consumers are actively shopping, more so than on portals or social networks where people are not as open to commercial messages. Targeted ads on e-commerce sites are seen as the most influential form of online advertising. 3. To market effectively online, brands need to understand shopper behaviors and whether to focus on building familiarity with a favorite site for frequent purchases or focus on search and discovery for

1. Preaching to the
nearly converted
An Advertisers’
Guide to online
retAil MediA

2. Designated copyrights, trademarks and brands
are the property of their respective owners.

3. introduction
Do you know what you are going to have for Much of what we read about in the marketing and There is a real art to retail in the high street. Location,
lunch today? Will it be the same thing you advertising press concerns the activities that get us to merchandising, store layout and even smell are
that shop door. Above-the-line media spend in the UK employed in almost an exact science when it comes
always have or is there a chance you might try
is around £19bn3. This is a considerable amount but it is to selling. However, what is the equivalent in an
something new? When you enter a shop to get still far less than in-store marketing. online situation?
your food are you absolutely clear what it is you
Online advertising spend in the UK has been growing at The purpose of this paper is to highlight the
are going to buy? a rapid rate. From a 3.6% share in 2004 to 23% by the opportunity for marketers, advertisers and brands in
first half of 2009, it has now surpassed TV as the top retail media online, and examine consumer behaviour
The answer is probably not. In fact, depending
advertising media4. Of this revenue, around 40% goes and purchase patterns to outline the potential for
on what you read between 20%–60% of all to portals and ad networks, 45% to social networks and advertisers. We look to draw some parallels with the
our purchases are unplanned1. Every business just under 15% to mainstream publishers. Less than 1% offline world and offer advice to brands looking to
knows that marketing and advertising do not goes to e-commerce businesses. Is that in the interests improve their online retail performance.
of brands or simply those that act on their behalf?
start and end at the shop door. As a result In order to market effectively to consumers, brands
there is currently a £25.6bn in-store marketing On eBay alone over £100m worth of goods are bought have to understand the market. Not just who your
each week, which is a huge number of purchase customers are or even what they do, but more
industry in the UK2.
decisions that could potentially have been influenced. importantly, why they do it.
1 The Wharton School, University of Pennsylvania
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2132
2 Institute of Sales Promotion http://www.isp.org.uk/news.php?pid=623
3 Advertising Association http://www.adassoc.org.uk/aa/index.cfm
4 BBC http://news.bbc.co.uk/1/hi/business/8280557.stm

4. Making retail
Media work harder:
understAndinG the
e-BuyinG consuMer
In 2009, eBay Advertising conducted two 1 online shopping is on the increase What products are you
detailed research surveys across UK, Germany buying more of online?
This may seem like an obvious point; however, it’s one 80 ■ ■
and France. Over 7,000 people were questioned worth clarifying. 80% of our respondents across all ■
Germany
France ■
UK
Total
about their online retail habits, decision making countries stated that they were looking to spend more 60
processes and motivations. There were a number online. This figure increased across vertical sectors when 40
it came to the festive season, with both entertainment
of significant findings:
and grocery shopping showing a 90%+ intention of 20
increased spend online. 0
es /
ie ,
tc t
tc s
s
m d
There are obvious conclusions to draw as to why this
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VD nm
ph b
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might be so. Firstly, there’s the evident impact of the
ac s, c
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rt
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recession. In the current economic climate, people go
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online to find value for money and great deals. Just as
importantly there is also continuous organic acceptance
of online as a bona fide channel on which to shop. This
is down to growth in access (penetration of broadband),
trust (secure payments have come a long way) and
selection (fulfilment infrastructure has also improved). “ i compared all the
We’ll touch upon this later. prices that came up
If we look at areas of strongest growth over the last on my google search,
year, we find that they are in goods that have both
tactile and emotional components in the decision
and clicked on the
making process. Online is not supposed to do this cheapest price for the
very well but purchasers of categories such as same product, only
clothing, shoes and accessories, and groceries
would beg to differ. The breadth of goods also after making sure the
continues to grow within each category, suggesting website was secure.”
that online shopping is no longer confined to very
specific items. online shopper France

5. 2 Motivations for shopping value which dominates whilst in groceries it is much more What are key motivations for
online vary by category about convenience. increase in online shopping?
81%
This behaviour suggests that online shopping has 69% 66%
Some of the reasons behind the growth in online become a familiar and regular behaviour governed by
% agree/strongly agree
shopping lie in the changing motivations for doing so. similar motivations found on the high street.
Historically, online shopping was about getting a bargain
such as finding the cheapest CD player you could. It is If we dig further into consumer motivations we find
not like that anymore. Trust, selection, and convenience interesting differences in how we both look for and
are now just as important. The idea of getting a bargain choose a supplier. I always get I choose sites I always
has been replaced with ‘value’ and that is an important the best
deal I can
with the best
selection
buy from
sites I trust
There are clear patterns that emerge which, in many
distinction as the variety of goods gets ever wider.
respects, parallel how we behave in the offline world. In
The prominence of trust as the key motivating factor the case of goods and services that are bought frequently Why do you buy more
when choosing where to shop online can be correlated (such as groceries), or those that have an element of of these online?
80 ■ Phones
with the strong belief that branded goods are better emotional choice or ego attached to them (such as ■ Entertainment
quality. Some might say that the democratic process of clothing or entertainment goods), consumers are more 60 ■ Groceries
the Internet has diminished brand value. Yet our findings, likely to pick a favourite supplier – a place they have
40
whilst supporting the notion that price has become less affinity and trust with – rather than search for them.
impactful on brand value, suggesting that branded goods 20
On the flip side, for items that are purchased more
still occupy a higher status than non-branded items.
infrequently such as household goods or items that 0
The importance of trust extends to the sites that online warrant a more logical decision making process – Better value
for money
Easier to
search
Better
selection
More
convenient
Spend
more time
shoppers will buy from, with recognised sites being such as electronics – then search is the preferred researching
preferable. One respondent to our survey stated: channel of discovery.
How does behaviour compare
“I compared all the prices that came up on my Google
We can go one step further and produce a matrix (see with purchase type?
search, and clicked on the cheapest price for the same
bottom right graph) where we compare how behaviours Regular
product, only after making sure the website was secure.”
such as ‘comparison’ are more prevalent with purchases Compare Favourite
Across many categories, trust, value and selection are that are frequent yet logical such as utilities, and research Logical Emotional
interchangeably the top three considerations. However activity is more dominant with purchases that are Search Research
for consumer electronics, phones and entertainment it is infrequent yet emotional, such as jewellery. Infrequent

6. 3 advertising can be highly impactful What is perhaps unexpected is the poor performance When are you most likely to
of both portals and social networks, both of whom pay attention to an advert?
Some would say it’s no surprise that a study conducted receive the lion’s share of display advertising revenue. 61%
by an e-commerce business offering advertising
opportunities, should find their placements so effective. We think it can be explained thus: we generally visit 41%
However, the findings of this survey continue to support portals to access information or to pick up email. We
the findings of an earlier one – that advertising in an generally go to a social network to socialise and share
12%
e-commerce environment is more likely to be noticed by with others. One might argue that these behaviours are 7%
consumers than any other. not as open to commercial messages as when one is
shopping. Think about this next time you are in the pub E-Commerce
site
Search
Engine
Portal Social
Network
But all things considered, this should not be surprising. and someone offers to sign you up to a credit card.
We visit e-commerce sites to browse, look for
This is not to say that advertising on portals or social What types of ads
inspiration and to shop. Why then should advertising in
networks has no value, but simply that brands may prompted you to buy?
this context not be extremely powerful when advertising
itself is ultimately designed to get us to make a purchase need to think differently about how they use them. 40
of one good over another? When we think about our Some brands are already adopting new ways of 30
own trips to high street stores and our response to in- engaging with consumers in these situations. Many
store offers, sign-posts and on-pack promotions, this however, are not. 20
feels absolutely right. In addition, we discovered that online advertising 10
per se has a strong value in influencing purchase
0
right across the media mix. We might be considered
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our findings show it holds its own within traditional
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ads whilst searching for used media. In particular, targeted ads on e-commerce
co
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sites were seen as the most influential of all online
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ads in the main web page.”
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online shopper UK

7. eBay advertising’s guidance
for online Advertisers
You may not have an online business right now: 1 think about your online distribution strategy
you will in the future. There is not a service or
Location, location, location is the oft repeated mantra
product that at some point in the future will not for retailers and it is no less important online. It is not
be sold through the retail channel of the Internet. enough to build a shop then expect people to find you.
If you think this is misguided, then consider that in Of course there are ways for brands to improve visibility,
with search being perhaps the most obvious one.
the past few years eBay has sold everything from
However, if you really want to build trust and familiarity to
a $10 broken laser pointer to a $5m Lear Jet. If your business you need to be not just easily found, but a
you are in business, then you are in the business regular feature of the landscape.
of selling. The opportunities to exploit the online There is much to be written about the success of
channel through advertising are enormous but we markets, retail parks and retail destinations. Consumers
have only just begun. will visit places like these because they can find
everything in one place. Shops will locate themselves
So as the e-tail world starts to open up to there because they benefit from the enormous footfall of
advertisers, here are some guidelines to get people out to do just one activity – shopping.
you started: So, when you build your retail outlet think about where
you can put it, not just how to advertise it. Put it where
millions of potential customers pass every day, doing
everyday activities.

8. 2 understand how consumers are If however your goods are more price led, infrequently
shopping for your product purchased, or require a more rational decision making
process then a focus on your discoverability through
As we have already discovered, the type of purchase search is more important. This doesn’t just mean
being made impacts not only what motivates people ensuring you buy the right keywords but that you
to buy a product or service online, but also who they consider a range of search options available to you.
choose to buy it from. Google may be the dominant player and arguably the
most important base of any successful search activity,
This insight should have a significant influence on your but there are a range of other options to add to this.
marketing mix. Is it about generating familiarity, or Consider eBay’s AdCommerce service with arguably
focusing on a search led strategy? the largest number of product based searches on the
If you are a retailer of groceries or entertainment then web. Other broad range search engines such as Bing,
it’s very much about the brand. That sounds simple to Yahoo and Ask also add good value and vertical search
say but of course it comprises many things. Service is engines and comparison sites such as mySupermarket,
arguably the most important, but selection of goods, comparethemarket and Blinkx represent a fast growing
trust and familiarity are just as important in an online trend that offers consumers more specific searching and
context. Online is actually a great channel at building advertisers better quality leads.
brands once we stop thinking about it in pure advertising Whatever sector your business is in, there are
terms. We refer you to our earlier point about distribution advantages to be gained by better understanding how
as a key pillar in building familiarity. your customers select you online.

9. 3 Make your advertising contextual None of these ideas are mutually exclusive. It’s likely that
most brands can and often do consider a combination.
The idea of context is not a new one, but with the But there are opportunities here that can be further
proliferation of advertising inventory on the web and exploited, and in particular the opportunity within retail
the measure of success being much more about the media goes a step further. From the car insurer who can
‘click’, one could argue that it is not held in the esteem speak to consumers who have just bought a car, to the
it once was. The advertising opportunity with online pram manufacturer who can talk to the consumer who
retail media really does change the game in this respect. has just bought new-born baby clothes: by monitoring
There is little question as to why someone might be and recording purchase behaviour online (same as it is in
on an e-commerce site and therefore little chance of any high street store) context can be taken to a new level.
misunderstanding the opportunity for the advertiser.
With so many online retailers opening their doors to
advertising, there are growing opportunities to influence
the purchase of your goods and services once inside the
store. Brands do this in the high street all the time so why
not online? An advert promoting a discount or a special
offer or an invitation to purchase is arguably better
placed in a retail environment than a social one.

10. toP
tips
The following are our top tips to help you make the 3 clarify how people choose to buy in your
most of your online retail opportunity: vertical and modify your marketing mix
appropriately. Do people use your brand
1 think about your online retail store the
for regular, logical purchases or less frequent,
same as you would do offline. Location is key to
emotional purchases?
optimise visibility and reach: there is no point in
having the most user-friendly store on the Internet 4 Make sure you look for context wherever you
if no-one is aware that it is there! can. Don’t underestimate the power of monitoring
purchase behaviour online. This can help you
2 our survey showed shoppers are most
reach consumers with messages that are not only
receptive to ads whilst on e-commerce sites
relevant, but are likely to influence a decision.
looking to buy products. So when making key
decisions about advertising placement, consider
where you will be able to take full advantage of
existing footfall of internet shoppers already in the
purchase-mindset.
“ as the online retail market grows, so too does the
opportunity for advertisers to engage with consumers
in this environment. this insight from eBay advertising
reflects the growing importance of the internet as a
sales channel, and the growing opportunity for brands to
influence those sales online just as they do in-store.”
david J. smith director of operations, iMrG.

12. For further information please visit
www.ebayadvertising.com