Mercari Looks To Ads For Japan Revenue Boost With Full Scale On & Off Site Launch
Mercari Japan is moving full steam ahead with launch of cost per click ad products offering increased visibility both on and off platform, leveraging users' purchasing data for targeted results.
The company announced the move in a press release last week, saying "displaying advertisements on Mercari that utilize purchasing data will provide Mercari users with an opportunity to find products and services that they cannot find on secondary distribution channels."
Mercari Ads, the advertising distribution service that is now being fully launched, is a pay-per-click advertising service that makes it possible to display ads that match search keywords on the search results screen within Mercari.
We will continue to monitor user usage and consider expanding our business in various ways, such as increasing the amount of advertising space.
Background to the launch of the advertising business
Japan's total advertising expenditure exceeds 7 trillion yen per year, of which Internet advertising accounts for approximately half, or 45.5%, of 3.333 trillion yen.In particular, the use of retail media, a method of delivering advertisements using customer data by retail companies, is accelerating, particularly in the United States, and e-commerce operators are beginning to develop advertising businesses.
In Japan, the retail media advertising market is also expanding year by year, and is predicted to reach 469.2 billion yen in 2024 and approximately 2.3 times that amount, to approximately 1.845 trillion yen in 2028.
Mercari has grown into a service used by 23 million people monthly, and we have determined that by entering the advertising business, we can establish a certain position in this market...
...By displaying advertisements on Mercari that utilize users' purchasing data, Mercari will provide Mercari users with an opportunity to find products and services that they cannot find on secondary distribution channels.
The release goes on to provide details about how these CPC advertising options will work both on and off theplatform: off-site ads direct users to external sites and on-site ads direct users within Mercari.
Off-site advertising
Product Ads - this is an advertising product aimed primarily at ecommerce businesses, and by linking product data feeds, it is possible to deliver ads with the same creative content as regular listing information.
Infeed Ads - this is an advertising product that allows advertisers of any industry to deliver ads by simply submitting images and text creatives.
On-site advertising
On-site advertising makes it easier for Mercari Shops products to be displayed on the search results screen.
Mercari says their users tend to spend more time on the site than on other marketplaces, giving them plenty of data to use to enhance keyword matching and targeting - though some users might find that idea a little creepy.
The announcement so far only applies to Mercari Japan, but given the call out of the size of the US retail media market, and continued lagging GMV performance, it won't be surprising if these ads eventually find their way to the US marketplace as well.
Mercari US already offers a "promote" feature which gives listings a boost in search results if the seller drops the price at least 5%, and while that may help make the sale in some cases, it doesn't earn Mercari any additional revenue beyond the fees they will collect on that discounted price.
But Mercari Ads sounds similar to the cost per click option in eBay's Promoted Listings program - and if so, before "increasing the amount of advertising space", Mercari should take a hard look at the bloated, confusing, and off putting way eBay stuffs over 300 competing ads on every listing page as an example of what not to do if your goal is to provide a positive buying experience.
Would you use pay per click ads to promote your items on Mercari? Let us know in the comments below!
