- Navid Nassiri
What are retail media networks, and why do they matter?
Advertising across retail media networks is rapidly expanding, with global revenue accounting for 18% of digital advertising and 11% of all advertising. By 2027, it is projected to grow by approximately 60%, outpacing the expected growth for all digital advertising.
But why have retail media networks become such a popular way for brands to advertise and engage with customers? In this article, we'll explore what retail media, and retail media networks are, and why they're important.
What is retail media?
Retail media refers to any advertising within a retailer's own digital platform or website. This could include ads placed on a retailer's website or app, or within email marketing campaigns or loyalty programs.
Retail media is often used to promote a retailer's own products, as well as to generate revenue by selling ad space to third-party advertisers.
What is a retail media network?
A retail media network is a platform that connects brands with retailers so that they can advertise and engage with their customers across a wider audience.
Retail media networks allow brands to create tailored ads to relevant audiences, measure consumer behavior, track sales and engagement metrics for more granular attribution, and optimize campaigns accordingly.
Consumer packaged goods (CPG) brands are currently the top category on retail media networks, with 85% planning to increase their ad spend next year. Additionally, brands in the jewelry, luxury goods, consumer electronics, and beauty industries also plan to increase their spend across this channel.
The rise of retail media: explained
Retail media networks have been gaining traction recently as more and more brands recognize the potential to reach new and more relevant audiences. They have become increasingly popular due to their ability to collect valuable first-party data, which is crucial for brands to create targeted advertising, particularly as third-party cookies are phased out.
Instacart and Walmart Connect are both experiencing significant growth in their retail media ad revenue. Instacart expects to reach nearly $1 billion in 2022, compared to $300 million in 2020, and Walmart Connect reports a 240% increase in advertising sales over the past two years.
Why is retail media important?
Retail media networks are important for brands because they allow them to create more effective campaigns and reach more customers.
Generate new revenue streams by monetizing their site traffic and audience data
Build stronger relationships with brands and suppliers
Offer a more personalized customer experience through targeted advertising and promotions
Get valuable insights into customer behavior
Track campaigns in real time and adjust them based on customer feedback
Get access to first-party data
Reach highly engaged and motivated shoppers at the pivotal moment in the purchase cycle
Increase visibility and drive sales by featuring their products in highly visible locations
As retail media networks continue to evolve, we’re seeing six key characteristics emerge:
Measurement and insights will form the foundation for the retail media network space, providing key metrics to analyze customer behavior, compare networks, predict trends, and drive conversions.
RMNs will expand their reach across multiple channels and platforms, including programmatic, CTV, digital out-of-home, and dynamic in-store media, to compete for brands' advertising.
Secure environments such as data clean rooms will become more commonly used to combine retailer and brand data, allowing for the creation of bespoke audiences and lookalike modeling - all while remaining privacy-compliant.
Ad platforms and private marketplaces will emerge to enable the running of holistic multi-network campaigns, managing issues such as audience overlap, messaging frequency, and optimization.
With a solid strategy, the right platform, engaging content, and careful monitoring and analytics, both retailers and brands can leverage the power of a retail media network for long-term success.
Want to make it even easier? Let Switchboard Software unify your data and streamline your processes for more effective retail media analytics. Get in touch with our team today to learn more.