Prioritize Matching Over Ads
Andrew Yates, CEO of Promoted.ai, on when marketplaces should layer on ads
The core point is that better matching usually monetizes a marketplace faster than ads do. If search, ranking, and recommendations help buyers find the right listing sooner, more visits turn into bookings or orders right away. That lifts ARPU without asking sellers to learn a new ad product, trust new ROI reporting, or fund a separate budget. Ads become attractive later, once the marketplace already has enough seller competition to charge for placement credibly.
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In practice, this means improving the screen the marketplace already controls. The same systems used in performance ads, measurement, attribution, A/B testing, and ranking, can be applied to organic search and discovery so the platform earns more when buyers complete more valuable transactions, not just when sellers buy placement.
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Ads are harder operationally than they look. A marketplace has to prove seller ROI, support campaign tooling, and often staff a sales motion to keep spend growing. That is why marketplaces with limited scale are usually better off fixing conversion and take rate first, and only adding ads when sellers truly compete for scarce attention.
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The large winners show the sequence. Amazon and Walmart built huge third party seller ecosystems first, then turned traffic into high margin ad revenue. Infrastructure companies like Mirakl now package that later stage playbook, while checkout networks like Rokt monetize already high intent moments after the core transaction flow is established.
The next wave of marketplace monetization will look less like bolting on banner ads and more like turning every search result, recommendation slot, and checkout surface into a measured economic decision. The companies that win will first make discovery measurably better, then layer paid placement into those surfaces once seller demand is strong enough to support it sustainably.