For this episode of Expert Connect, I spoke with Joe Shelerud, owner, co-founder, and CEO of Ad Advance. Watch or read the conversation below, recorded at Prosper Show 2022 in Las Vegas.
Sreenath Reddy: Joe, it’s great to have you here. Do you want to tell us a little bit about Ad Advance and yourself?
Joe Shelerud: It’s awesome to be here. So for Ad Advance, I actually got started as a seller in 2014 and as I was growing my brand there, was starting to look for different options for agencies and wasn’t really finding much at the time. So started developing my own little platform—that was in about 2017—and then that was kind of the initial birth of Ad Advance. We focused a lot on our platform and our technology for the first three years. And then after that point, we really scaled into sponsored ads and DSP [Demand-Side Platform].
SR: And you’re based in?
JS: Based in Duluth, Minnesota, so pretty close up to Canada.
SR: I’ve been there twice, great city. So how has the conference been so far?
JS: It’s been awesome. It’s so fun, the Amazon community—it’s so nice to see people in person. You’re always connecting with people like yourself all the time. And so just being able to see everybody in person and collaborate with sellers and other tool providers and vendors. It’s so awesome.
SR: Any new things you’ve found this time around?
JS: There’s always so many key takeaways that we see. For this year, we’ve had a lot of conversations about Amazon DSP and just kind of taking your ads to the next level. So we’ve really focused on the sponsored ads side, and now DSP is kind of that next major growing point. So there’s definitely been a lot of interest on the seller side for that.
SR: Let’s dig into that a little bit. Around DSP, I know you guys do a ton of work in that area. How are you leveraging DSP to complement search ads? Any best practices that folks should know?
JS: DSP is an awesome spot to go after you’ve really formalized your sponsored ads. And so you don’t want to get into DSP from the start. You want to make sure you have a very solid foundation with your advertising and then get into DSP after that. DSP just offers so many cool opportunities to be able to tie in to Amazon’s data and to develop really complex strategies and audiences where you can—you have a lot more control than you have with sponsored ads.
SR: Talking about DSP search feels old, but it’s still super important. Any commentary on what you expect to see for the rest of the year around cost-per-click (CPCs), any other trends that are worth noting?
JS: Yeah, on the sponsored side. One major trend over the last year was we’ve seen CPCs increase by 30, 30-plus percent. So costs are going up, competition is definitely going up. I think some key trends that we’re going to see: I’m expecting CPC growth to slow, because at some point you’re not going to be able to achieve that break-even ACOS [advertising cost of sales], and people are going to slow down on the competition on the sponsored side. At the same point, Amazon doesn’t have many more placements that they have on-platform to show ads. And so where a lot of the growth that we see in advertising is going to be actually in off-Amazon placements or other unique placements on Amazon where they could try to squeeze in some more ads. So that’s why we’re really focused on Sponsored Display, starting to have a lot of efforts off Amazon, and then DSP, a lot more off-Amazon opportunities. From Amazon’s standpoint, it’s a great way to leverage their data to continue to expand ad spend. From our perspective, a great way to help grow and scale brands overall.
SR: Totally. Do you work with primarily endemic advertisers or non-endemic folks?
JS: We do both. Primarily, we work with Amazon sellers and we’re driving them back, but we’re seeing a lot of opportunity now. If you look at the digital advertising space, you have people spending a lot on Google and Facebook, but now Amazon is a major third piece to that. And so I think a lot of larger brands are really learning that DSP can actually be a great alternative to diversify your ad spend, especially when we’ve seen changes like the iOS updates, where Facebook is now getting hit due to privacy issues. A lot of people are looking for alternatives on where they can move their digital advertising spend. DSP is a great spot, just because you have consumer shopping audience data that you can use to make sure that you’re reaching the right customers with your ads.
SR: You mentioned the impact on Facebook. I think Google also is starting to tighten the screws a little bit, so that should all benefit all of retail media, I assume.
JS: Exactly. Yep. Google just talked about removing cookies in the next couple of years, which helps with tracking on their side. So yeah, the space is really changing. And one thing that’s staying constant right now is when you complete a purchase or you look at something within Amazon, and it’s all within their app. And so you get such great information to again, try to show relevant ads that really mean something for the end customer that also perform really well.
This interview has been edited for clarity and length.