New ad platform lets retailers monetise digital shelf space

Sponsored posts on Dan Murphy’s website via Citrus.

The inside of a retail store is like a battlefield. The victors claim pride of place on middle shelves and end caps, where they are more likely to be seen and purchased by customers, while the losers are relegated to less desirable locations.

Various studies over the years have confirmed that middle shelves are associated with higher conversion rates, and brands go to great lengths – and spend significant sums – to secure the best placement in stores.

But while this is a long-established norm in bricks-and-mortar retail, brands typically have far less control over their placement on e-commerce sites.

Ex-AFL player and entrepreneur Brad Moran is looking to change that with the launch of a new digital advertising platform, Citrus, which enables brands to pay for the top spot on a retailer’s website.

“Retailers are very good at monetising in-store shelf space, but there was a technology gap [to do the same] in the e-commerce world,” Moran told IR.

At the same time, he said, the opportunity to monetise digital shelf space is actually much greater than in bricks-and-mortar stores.

“There’s only one middle shelf in a supermarket, and retailers can’t change the shelf for each customer. But in the digital world, that becomes possible, and retailers can therefore maximise revenue from a magnitude of suppliers.”

Like they would for Google and Facebook advertising, brands may allocate a daily budget to bid on the top spots on a product or category page, but it’s not always those with the biggest budgets who are featured, since winning bids are chosen based on their relevance to the end customer.

“We look at personalisation before we look at how much money a brand is prepared to pay. We know that personalisation and user experience are hot topics,” he said.

Citrus CEO and co-founder, Brad Moran

According to Moran, 14 Australian retailers including Dan Murphy’s currently use the Citrus platform, which became available less than a year ago. He said six more are due to sign up before Christmas.

“The majority are public companies, so I can’t say who they are,” he said, though he noted that supermarkets, electronics stores, pharmacy chains and marketplaces are well suited to the platform.

The appeal of Citrus for retailers is simply access to a new revenue stream, but it potentially has far greater significance for brands, since they are able to influence customers closer to the digital point of sale than is possible on Google or Facebook.

“On Google and Facebook, you’re influencing people while they’re researching or browsing social media. We’re capturing people right at the point of making the [purchase] decision, which is quite powerful,” he said.

According to Moran, brands that use Citrus on average see an $8 return for every $1 spent, though this differs across products and categories. And plans are already in the works to make brands’ ad spend more effective by linking Citrus into other platforms like Google and Facebook for retargeting.

“Over the next 12 months, we’re working on being able to drive people to a site, advertising to them on that site following them after they leave,” he said.

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