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Moloco Commerce Media GrowthU
At Moloco Commerce Media, we recognize that a well-defined ad model is not just a formality — it's a strategic blueprint that shapes how you engage with advertisers and manage your advertising ecosystem. Effective ad policies and product offerings ensure transparency, set clear expectations, and build trust, thereby facilitating smoother transactions and better relationships with your advertisers.
Build and grow your advertising business with Moloco Commerce Media
An ad model is the foundation of your advertising operations and ensures that you and your advertisers clearly understand what to expect in every aspect of the partnership. This clarity leads to better planning, fewer misunderstandings, and more successful campaigns. By establishing comprehensive policies, offerings, and creative guidelines, you're not just regulating transactions; you're enhancing your advertising efforts' overall effectiveness and efficiency.
Here's what we'll cover:
By the end, you'll have all the tools and knowledge needed to create an ad model that supports your business goals while maintaining a high standard of fairness and transparency.
First, you must choose either a first-price or second-price auction type. Below are the tradeoffs and recommendations for each, as well as the auction types across major US retailers and marketplaces.
Comparison of 1st- vs. 2nd-price auctions
Auction types by major US platforms
Your pricing model sets the foundation for how you'll charge advertisers for running ads on your platform. Pricing models can include cost-per-click (CPC), cost-per-mille (CPM), cost-per-time (CPT), or cost-per-order (CPO). Below are the pros and cons of each, recommendations for best use cases, and industry benchmarks to compare your offering against.
Comparison of popular ad pricing models
Pricing floors
After you choose your auction type and pricing model, set a minimum (and maximum) bid limit for advertisers. Start high, to see how well the ads perform, and determine how sensitive your advertisers are to their ROAS. Then, adjust the floor based on conversion rates during a test phase. Below are the pricing floors offered with major US retailers and marketplaces.
Pricing floors by major US platforms
Ad budgets create guardrails around an advertiser’s campaign, to make sure they don’t over- or underspend.
Budget type and range
Your ad policy should define budget types (daily, weekly, or both) based on your advertisers’ preference and habits.
Establish minimum and maximum thresholds to guide advertisers in setting their budgets. We recommended that you set a high daily minimum (e.g., $10-25) to avoid low budgets, but ultimately the floor should depend on the types of advertisers you have.
Budget ranges by major US platforms
Attribution is the process of determining which ads led to a desired outcome, such as clicks or purchase.
Attribution type
The two typical types of attribution are direct and total. Direct attribution assigns credit to the last touchpoint before a conversion, while total attribution distributes credit across all touchpoints in the customer journey.
Attribution window
Your ad policy should clarify your platform’s attribution model. The most used window is 14 days, but any policy and offering should align with your platform's goals and capabilities. Market benchmarks and your specific industry’s best practices can help inform your decision-making process.
Comparison of ad attribution windows
Attribution windows by major US platforms
There are two typical payment methods, postpay and prepay. Your business and ad policies will need to weigh the tradeoffs and communicate what you offer to advertisers. In most cases, we recommend postpay if spend limits are in place to prevent fraud and ensure financial stability. Below are the pros, cons, and budget ranges offered by major US retailers and marketplaces.
Comparison of ad payment methods
Payment methods by major US platforms
Work closely with your legal team to identify which products or services may be illegal or harmful, and thus prohibited from being advertised, or subject to additional restrictions. Tailor your prohibited items list to comply with local laws and regulations, ensuring a safe and ethical advertising environment.
Examples of items that may be prohibited or subject to restrictions (by market)
Build and grow your advertising business with Moloco Commerce Media
While sponsored product listings are typically native to the shopping experience, you’ll need to establish creative guidelines for any sponsored banner or brand overlay campaigns on your commerce network.
Work together with brand and legal teams to develop reasonable ad standards. Outline specifications for creative assets, including dimensions, format, resolution, and ad copy requirements. Emphasize the importance of timely, accurate, on-brand messaging, while prohibiting inflammatory content, misinformation, and inappropriate language.
Banner ads: Example formats
Banner ads can appear on Home, Category, and Search result pages. To ensure a timely campaign launch, advise advertisers to submit creatives for approval at least three days prior to the campaign start date.
Ad copy requirements
Clarify your ad copy requirements, from the timeliness and accuracy of your messaging to CTA formatting.
General creative guidelines
Beyond format and copy, there are additional guidelines you will want to include such as:
Establish a creative review process
Once you’ve defined your ad format and creative requirements, set up a clear and efficient review process. Provide detailed approval timelines, rejection protocols, and procedures for re-review requests. Streamline the process to minimize delays and ensure a seamless experience for advertisers.
Build and grow your advertising business with Moloco Commerce Media
Crafting a robust ad model and policy is essential for the success of your retail media business. By carefully considering each component and working closely with your team, you can develop a comprehensive ad policy that fosters transparency, trust, and mutual success for advertisers, consumers, and your bottom line.
In the next article from our GrowthU series, we’ll demystify acronyms like CPT, CPC, and CPO to help you find the right ad pricing model for your business.
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