ANALYSIS The ad-load trap: the hidden threat to retail media?

You might be familiar with this story: you are a regular user of an app, or a media site – or a sports site. Gradually you notice that it is harder to get to the content you want, as you appear to be trapped in an obstacle course of sign-ups, pop-ups and ads. Eventually you sidle off sullenly to another site promising the same content – only to find that it too gradually succumbs to the same cycle of ‘more’: more ads, more pop-ups and more things that get in the way.

This gradual degradation happens as a result of the site prioritises revenue at the expense of user experience. It’s a trap. Retail media expert Raj Redij-Gill believes the trap emerges when relevance is ignored in the rush for higher revenue.

In the case of Retail Media, the simplest analysis of the problem is one of ‘ad load’ – an increase in the number of advertising ‘units’ per page.  

Redij-Gill points out the sequence of events that leads to this trap:

• Stage #1: Retail media initiatives start with great promise. By adding a few sponsored product slots, retailers can generate immediate revenue without dramatically altering the shopping experience.
• Stage #2: The retailer is conservative and the balance between organic and sponsored products remains intact, and the shopper experience doesn’t suffer.
• Stage #3: Initial success is achieved, everyone gets excited and senior management – who don’t know the outcomes of increasing the number of advertising units per page, asks the Retail Media team to increase revenue and by adding more ad slots.
• Stage #4: The Retail Media Network starts prioritising revenue over relevance, targets over customer experience.
• Stage #5: As more ad slots are introduced, ad load per page increases and relevance starts to slip. Organic listings end up below the fold. Sponsored products take priority. Shoppers get frustrated with irrelevant result.
• Stage #6: Trust is eroded and shoppers set-off for other sites to get what they actually want, not what the retailer wants to sell them

Initially, nothing happens.  There are immediate gains. Long term, it’s another story. Click-through rates and conversions gradually drop, and advertisers get poorer results for their investment. 

Lead us not into temptation: avoiding the trap

The keyword – if you will forgive the pun – relevance.

Redij-Gill points out that “shoppers don’t mind sponsored products, as long as those products meet their needs. When relevance is prioritised, engagement increases, click-through rates improve, and conversions rise. Advertisers also benefit, as their ads reach a more targeted, engaged audience, driving higher returns on their investment.”

Redij-Gill continues: ”relevance is more than just a filter on which products to show—it’s about keeping the customer experience central to every decision. Without relevance, even the most sophisticated retail media efforts will struggle to maintain long-term value.”

Here are five steps that retail media networks should take according to Redij-Gill:

#1 Define your retail media principles: view every decision through the lens of relevance

Many retailers already use bidding systems to prioritise sponsored products. However, it’s not enough to simply reward the highest bidder. Sponsored placements must also serve the shopper’s needs, not just the advertisers. Retailers should move beyond standard bidding models means using data-driven algorithms to assess customer behaviour, shopping patterns, and contextual signals to ensure that the products being promoted align with shopper expectations.

#2 Balancing sponsored and organic:  refocus on relevance

Relevance needs to be the driving force behind how retailers balance sponsored and organic products. Standard metrics such as ad-to-organic ratios, click-through rates, and conversions should be looked at, but the most important question is “are these metrics reflecting relevance to the shopper”? Analysing all metrics through the lens of relevance improving the overall shopping experience 

#3 Personalisation: elevating relevance, not just performance

Personalisation is one of the key capabilities behind Retail Media.  AI and machine learning are being used to create  personalised product placements is great, but, again, the lens we must look through all if these is relevance. Ask yourself ‘is our personalised advertising making our ads appear as natural, useful recommendations that align with what the shopper wants as opposed to random insertions?

#4 Reframe A/B testing and metrics: monitor their success through relevance

A/B testing, monitor click-through rates, and track conversion rates are great tools for optimising performance, but the key differentiator is how these tactics are applied with relevance as the primary focus.

Raj Redij-Gill gives an example: “if you are running A/B tests to optimise ad placements, the goal shouldn’t just be to maximise clicks—it should be to determine how relevant those clicks are to the shopper’s intent. Metrics like click-through rates and conversion rates are essential, but they need to be interpreted with relevance in mind. “

#5 Align with advertisers on relevance

The final point is that Retail Media Networks should collaborate with their advertisers to align relevance as core strategy. Advertisers may want results, but they also need to reach shoppers who are engaged and want to buy.  Make sure you communicate with your advertising partners that campaigns that prioritise relevance over volume are what matters. Use the data and insights capability to share what resonates with shoppers to build trust 

Reminder: relevance matters

Retail Media Network must identify the point where they are tipping into prioritising revenue over relevance. While it’s tempting to add more ad slots and push revenue higher, this will lead to trust going down.

Now, you might say that Amazon are increasing their ad load and they are getting away with it – just look at Amazon Advertising revenues.  The riposte to this is always the same: you are not Amazon. You are not a $600bn a year behemoth – so you cannot replicate their strategies!

The long-term success of Retail Media for every part of the industry – retailers, advertisers, adtech, marketers, agencies – hinges on relevance. 

Let’s leave the last point to Raj Redij-Gill: relevance drives engagement and engagement drives revenue. Retailers can ensure that their retail media strategy remains profitable and customer-focused through the lens of relevance.