E-commerce has opened up incredible opportunities for retailers to directly reach customers. However, alongside the benefits, challenges arise, most notably the low conversion rates.
Typically, only about 2% of web traffic converts into purchases. This begs the question: What about the other 98% who browse but don't buy? They represent a significant investment in marketing, site development, hosting, and more—investment that, traditionally, hasn't been monetized by retailers.
At M3—short for "Make Merchants Money"—we see this as a substantial missed opportunity. Co-founder Michael Cassidy shared the philosophy behind our name and approach:
We intentionally started with the name M3 because it felt very authentic. It felt a little cheeky and put a stake in the ground—we have conviction on this idea, and it's really about monetization for retailers.
M3 is pioneering a new monetization channel specifically for e-commerce retailers to tap into the 98% of traffic that doesn’t convert—by facilitating brand advertising and sponsorships on their sites. During a recent episode of the Taking Inventory podcast, Michael elaborated on the rationale behind focusing on this often overlooked segment:
The data I keep going back to is that the average e-commerce conversion rate is 2%. Focus on the 98% who don't buy a thing, who don't put a dollar in your pocket. Yet, you spend money, time, and effort getting them there and keeping them there. You have to monetize that investment.
Podcast host James highlighted the parallel between our model and successful strategies used by mobile app developers:
This more than anything reminds me of just mobile app developers, something that they've known for years—if you're going to pay to get people to download your app, only a very small percent are going to convert to purchase something. The rest have to be subsidized through advertising.
Consider the scenario of shopping for luggage on sites like Tumi or Samsonite; you are likely a traveler. Airlines, hotels, rental car companies, and more would jump at the opportunity to place brand messages in front of this qualified audience. This potential extends across all e-commerce verticals. Michael Cassidy noted the timely relevance of M3's model:
This isn't a novel idea, but it's an idea that's prime for this point in time with inflation, COVID pulling sales forward, rising ad costs, Amazon's marketplace dominance, and overall pressures on being a retailer.
By unlocking this new revenue channel, M3 empowers retailers to convert window shoppers into a lucrative revenue stream. We package this offering as a premium, high-touch branded solution rather than direct response ads, ensuring a seamless integration that respects the retailer's environment and enhances the shopper's experience.
Michael Cassidy's successful track record and the positive reception from retailers signal a promising horizon for M3. As podcast co-host Daniel remarked:
This is your third act, Mike, and the first two went pretty well, so it's a little hard to bet against you at this point.
We're excited to help this vision become a reality for e-commerce retailers.
Listen to the Full Podcast
Want to hear more insights from Michael on the genesis of M3 and the future of brand commerce? Check out the full episode of the Taking Inventory podcast:
Interested in learning more about M3 and our offerings? Reach out to our team [sales (at) m-three (dot) co] to discuss partnership opportunities.
Michael Cassidy is an entrepreneur who has started and exited multiple companies. He founded and served as Undertone CEO for 14 years (acquired by Perion). He created a family office (August Spark) to make direct investments, including purchasing BVA, the largest Shopify Plus agency in the US (acquired by Accenture). Michael was an E&Y Entrepreneur of the Year Award Recipient and subsequent judge for the competition and has been a YPO member since 2008.
About Taking Inventory | Ex Snap execs, founders & angel investors James Borow and Daniel Druger, cover all things ad tech, big tech, digital media & more. They are joined for in-depth conversations by special guests that are directly shaping the digital economy.
