Failing to recognise the highly lucrative opportunities that lie in front of them is costing UK retailers £1 billion in advertising revenue, according to a new infographic.
Research carried out by OC&C Strategy Consultants, a firm that delivers strategic advice to large businesses, indicates that British retail websites could be making at least £1 billion more per year by rolling out the red carpet to online advertisers.
Analysts responding to the findings claim that British sites are “behind the curve” when it comes to monetising their domains and have called on companies to make more out of the chances on offer.
Retailers lag behind
UK retailers have generated around £150 million over the last year by selling search, display and trade advertising on their sites. However, the total could be much higher if only they utilised the full range of commercial opportunities on offer.
With an estimated 7.5 billion page views for March 2014 alone, OC&C says UK retailers are in an ideal position to benefit from display, featured product and sponsored link campaigns. Yet a lack of awareness in regards to the type of advertisements on offer and the technology needed to support them are holding the websites back.
As a direct comparison, news websites seem to be having no such problems in converting their traffic into cash - managing annual online ad revenues of £400 million.
The wrong message?
Anita Balchandani, a partner at OC&C, believes that although the UK has one of the biggest web economies in the world, its retailers have been slow to pick up on the commercial opportunities that come with this billing.
“This has been the case for a number of reasons,” she claims. “Firstly, e-retailers have been concerned that advertising on their websites could potentially deflect consumers away from their site.
“They have also been worried by the effects that promotional messages on their website may have on consumer perceptions of their brand.”
OC&C has attempted to quell their worries by highlighting all the positive things they could do with their extra ad revenue.
Nearly half of UK retailers responding to the firm (56%) ranked giving their customers value for money in their top three points of focus, with 44% voting for low prices and 33% opting for free delivery. OC&C believes that if UK retailers were to realise their commercial potential, these ambitions could well be achieved.
For more insights on UK retailers and their online businesses, check the infographic below.