Commerce Media: The ‘PromoteIQ Shutdown’ and what you need to know

The big news in commerce media recently is the shutdown of Microsoft-backed PromoteIQ's onsite offering. Here is what retailers and marketplaces should consider as they scale their ad business:
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Reminder: Onsite advertising drives the majority of retail media

Onsite ads are the most critical source of growth and profits for most media networks. According to BCG, onsite ads contribute 70 to 90% of retailer profit margins. Onsite advertising includes ads shown on a retailer’s website or app and includes sponsored product ads, shoppable display banners, and shoppable videos.  These ads are much more profitable than offsite advertising because the retailer is monetizing assets they already own — user attention at the point of purchase and first-party data. Onsite advertising also allows retailers to fully integrate ads into their user experience and deploy advanced machine learning to personalize product selection, improve advertiser performance, and fully utilize first-party data.

Onsite advertising accounts for 80% of retail media revenues, and eMarketer indicates it will account for approximately 70% of overall retail media growth over the next few years. Amazon and Walmart already command over $40B in media spending from advertisers, representing 80% of the retail media market. Their playbook is increasingly apparent (and repeatable for other media networks): focus first on high-performing, personalized onsite technology. 

If a media network’s focus is profitable growth, it must invest in onsite ads.. When done right, onsite ads  deliver higher revenue for retailers, greater relevance for users, and better performance for advertisers.

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Retailers are ‘in housing’ ads businesses

Retailers, many of whom initially outsourced their retail media operations, have faced challenges in scaling demand, building ‘owned’ capabilities, and maintaining control over strategic relationships with advertising partners. Many retailers are reclaiming these capabilities in-house, leveraging white-labeled technology solutions and building internal teams to better align with their suppliers. This shift allows retailers to integrate ad sales with their core business operations, enhancing collaboration with suppliers and driving growth. To be clear, ‘in housing’ does not mean building everything yourself; rather, it involves selecting  ‘best-of-breed’ technology that fits your ‘built-to-purpose’ stack. 

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PromoteIQ’s onsite shutdown: A wake-up call 

PromoteIQ represented the ‘first wave’ of retail media innovation. It helped many retailers take the first step in monetizing their digital assets — i.e., it allowed retailers to go from zero to one, but not meaningfully farther. Recently, PromoteIQ has been best known for its access to the Microsoft Audience Network (Microsoft Search, Video extensions) and offsite capabilities such as Xandr. While the reasons for shutting down the onsite offering have not been publicly disclosed, it is most likely due to a combination of limited, increasingly outdated onsite capabilities and its small scale within Microsoft’s overall portfolio. The shutdown highlights at least two key lessons: first, a ‘built-in demand’ centric product struggles to override legacy technology. Second, retailers need to build resilient, ‘owned’ architectures to prevent the future risk of being ‘de-platformed’ which is always a risk when part of a larger ecosystem. 

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Moloco solves your needs

There’s a little-known secret in retail media — most media networks are barely scratching the surface when it comes to using first-party data for personalization. At Moloco, we’ve addressed this issue.  

Moloco is the leading machine learning-native onsite platform. Our tech, similar to what is used by tech giants like Amazon, Google, and Meta, can help to increase your onsite ad revenue by 3-5x. How? Through flexible architecture, superior performance powered by real-time machine learning, one-to-one personalization, and automation to scale advertiser adoption. We achieve all this while collaborating with your team to develop robust in-house ad operations capabilities. 

The retail media industry is the third wave of digital marketing. Google was not the first search engine, and Facebook was not the first social network, but they ‘won’ through superior technology. So far, retail media is following a familiar pattern — Amazon and Walmart have captured 80% of retail media spending in the U.S. It would be a shame if Amazon and Walmart turned out to be the only winners of the third wave. 
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‍Get started and maximize onsite ad revenue with Moloco.
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