Ads Drive Consumer Demand. The Shelf Captures It
DoorDash data shows shoppers buy competing brands when preferred products are out of stock, highlighting a huge growth opportunity for brands to capture demand, according to AdExchanger.
Original reporting · adexchanger.com
Read “Ads Drive Consumer Demand. The Shelf Captures It” at AdExchanger →How this was written. Clicktag wrote this article with a language model from AdExchanger’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from AdExchanger’s report
- The retail industry loses an estimated $1.7 trillion annually due to inventory distortion, presenting a growth opportunity for brands.
- Capturing demand requires understanding the conditions under which advertising is trying to convert, including product availability and digital assortment.
- Breaking down data silos is essential to drive growth and optimize campaigns effectively.
The retail industry loses an estimated $1.7 trillion annually due to inventory distortion from out-of-stocks and overstocks, AdExchanger reported. This issue presents a significant opportunity for brands to grow by capturing unfulfilled demand.
Most commerce media platforms excel at measuring advertising performance but lack understanding of the conditions under which advertising is trying to convert, making it challenging to optimize campaigns effectively.
Conversion is not just a media outcome, but also depends on factors like product availability, digital assortment, and product details, which can derail conversion if not properly managed.
Conventional advertising metrics can provide insights into what happened, but often lack context to explain why, leading to potential misoptimization of campaigns.
Bad diagnosis of campaign performance can lead to incorrect optimization, such as shifting budget away from products with demonstrated consumer demand due to availability issues.
Breaking down data silos is crucial to drive growth, as organizations need to connect marketing, ecommerce, sales, and supply-chain data to understand the full order journey and identify areas of improvement.
New approaches, such as DoorDash's Ads Manager evolution into Brand Center, aim to connect advertising data with real-world commerce signals, providing brands with a more comprehensive view of their campaigns' performance.
Questions and answers
What happens when a shopper's preferred product is out of stock?
The shopper may buy a competing brand or request a refund, resulting in a lost opportunity for the preferred brand.
Why is it challenging to optimize campaigns effectively?
Most commerce media platforms lack understanding of the conditions under which advertising is trying to convert, making it difficult to optimize campaigns.
How can brands capture unfulfilled demand?
Brands can capture unfulfilled demand by breaking down data silos and connecting marketing, ecommerce, sales, and supply-chain data to understand the full order journey.
