Advertising is undergoing a rapid transformation. The market is expanding, and competition is fierce, posing challenges for those attracting new customers. Embracing new marketing tools and adapting to emerging trends, such as the imminent demise of third-party cookies, is important.
This is where Retail Media Networks (RMN) come into play. They harness first-party data and provide customized advertising experiences through collaborations with eCommerce platforms. These platforms offer opportunities to showcase and distribute their brand partners ads through their exclusive channels.
Not surprisingly, the field of Retail Media is continuously expanding, еxpected to reach up to $50 billion by 2026.
Let’s explore how Retail Media Advertising and Retail Media Networks work and how they benefit businesses on the verge of the post-cookie era. Keep reading to learn more about:
- What’s going to happen next after the death of third-party cookies?
- What is Retail Media Advertising?
- What are Retail Media Platforms (RMPs) and Retail Media Networks (RMNs)?
- What factors should you consider when choosing RMS for your business?
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From Third-Party Cookies to First-Party Data
By 2024, third-party cookies will be completely switched off. This will affect 80% of advertisers that rely on third-party cookies Futhermore. 70% believe the world of digital advertising will be negatively affected by their disappearance. At the same time 91% of consumers would be more willing to buy from companies that provide personalized offers and advice.
Indeed, personalization is key for eCommerce. A new type of customer journey is needed to foster long-term relationships. Instead of relying solely on third-party cookies, the focus should be on creating valuable and lasting bonds throughout all stages of the user journey.
First-party data plays an important role in achieving this goal. Unlike third-party cookies, it provides direct and comprehensive information collected through touch points such as apps, emails, and social media. It gives a more complete user profile, enhancing multichannel capabilities and deepening understanding.
The future of post-cookie marketing lies in the collection and integration of first-party data.
This calls for brands to assess how they can effectively identify and reach their customers in the eCommerce realm. One promising solution lies with their existing retail partners.
What Is Retail Media Advertising?
Retail Media is a form of advertising that covers marketing activities taking place within a retail environment or executed directly by retailers. It revolves around businesses displaying their ads for products or services on a third party retailer’s website.
For instance, you might see Nike advertising their products on Walmart’s website. While it may resemble traditional display advertising, the big difference lies in the placement (i.e., on a retailer’s website) and the utilization of the retailer’s first-party data for targeted advertising.
Retail Media ads exist in various forms:
- Sponsored products. Brand’s products or services featured on a retailer’s search results page.
- Onsite advertising. Display ads on a retailer’s website.
- Offside advertising. Brands use a retailer’s first-party data but the ads are displayed on a different website (not the retailer’s).
An Example of Retail Media
Amazon, having paved the way in Retail Media a decade ago, stands as the prime example, with its Amazon Advertising. Through Amazon Advertising, businesses can create display ads, sponsored product listings, and video ads that appear on Amazon’s website or app, as well as on third-party sites within the Amazon Advertising network.
The platform leverages first-party data to target audiences, taking into account criteria such as search history and purchase history. In addition, Amazon Advertising offers detailed reporting and analytics tools so brands can track the performance of their ads and optimize their campaigns.
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Benefits of Retail Media for Brands
Retail Media offers numerous benefits for businesses. Let’s take a look at a few of the key ones:
- Targeted advertising. Brands can target specific audiences based on various criteria, such as shopping behavior, demographics, and purchase history.
- Increased visibility. Retail Media enables businesses to amplify their visibility and expand their audience reach by showcasing products and services on renowned retail platforms.
- Contextual Relevance. Retail Media provides an opportunity for brands to display their ads in a relevant context, appearing alongside related products or within relevant product categories.
- Conversion Opportunities. Businesses can engage with potential customers at different stages of the customer journey, increasing the chances of conversion and driving sales.
- Data-Driven Insights. Retail Media platforms offer data and analytics, allowing brands to gain insights into customer behavior, campaign performance, and ROI, which can benefit future marketing strategies.
- Competitive Advantage. Businesses can gain a competitive edge by promoting their products alongside competitors or by strategically positioning their offerings.
- Cross-Selling and Upselling Opportunities. Retail Media enables businesses to promote complementary or upgraded products to customers, encouraging cross-selling and upselling.
- Enhanced Brand Image. By associating their brand with reputable retail platforms, businesses can enhance their image and build trust among consumers.
- Collaboration with Retailers. Retail Media facilitates collaboration between brands and retailers, fostering mutually beneficial partnerships that drive business’ exposure, sales, and customer loyalty.
Retail Media Platforms (RMPs)
A Retail Media Platform (RMP) is a high-tech system offered by retailers to handle and make money from digital ads. Think of it as the retailer’s own advertising hub within their online store, website, or mobile app.
Popular examples of Retail Media Platforms are Amazon Advertising, Walmart Connect, and Target’s Roundel. These platforms provide nifty tools that let advertisers create and control their ad campaigns. They can target specific audiences based on data insights and measure how well their ads are performing. The main characteristics of a RMP are:
- Retailer-owned. The platform is owned and operated by a retailer, providing them control over their advertising ecosystem.
- Digital touch points. It focuses on managing advertising within the retailer’s own digital properties.
- Advertiser tools. It provides self-service tools for advertisers to create, manage, and measure ad campaigns.
- Targeted advertising. The platform enables advertisers to target specific audiences based on customer data and insights.
- Monetization. The retailer generates revenue by selling advertising inventory to advertisers on their platform.
Retail Media Networks (RMNs)
A Retail Media Network (RMN) is an advertising technology (AdTech) platform that a company either owns or operates. It’s like a one-stop hub that brings together all the advertising spaces available on the retailer’s websites, eCommerce platforms, and mobile apps, and then offers them to different brands.
The difference between RMP and RMN is that RMN is a network of multiple retailers or eCommerce platforms that have joined forces to offer a combined advertising solution. It creates a larger ecosystem where advertisers can reach a wider audience across multiple retail properties. Retail Media Networks typically aggregate data and provide advertisers with a broader reach and targeting capabilities across the participating retailers’ digital properties.
The key characteristics of a Retail Media Network include:
- Multi-retailer collaboration. It involves multiple retailers or eCommerce platforms partnering together to create a unified advertising network.
- Expanded reach. Advertisers can access a larger audience by advertising across multiple retailer properties within the network.
- Data aggregation. The network combines customer data from multiple retailers to provide enhanced targeting capabilities.
- Shared technology. Retailers in the network may use a shared technology platform or infrastructure to facilitate ad serving and campaign management.
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Retailers Build Their Own Retailer Media Networks
More businesses are building their own Retail MediaNetworks to capitalize on the advertising potential within their digital ecosystems. From Walmart to eCommerce companies such as eBay have hopped on the bandwagon because:
- Bringing a RMN allows them to take advantage of eCommerce.
- With the demise of third-party cookies, they seized the opportunity to leverage their own first-party data for ad targeting.
A few examples of RMNs launched by big retailers:
- Walmart Connect. Walmart Connect offers advertisers an opportunity to reach audiences online and across its brick-and-mortar locations.
- Retail Media+. This RMN created by Home Depot offers benefits such as programmatic advertising based on Home Depot own data, social media and Google Shopping options.
- Walgreens Advertising Group. Walgreens’ RMN offers access to over-the-top (OTT), CTV and linear TV audiences.
10 Things to Consider Before Choosing a Retail Media Network
The potential of Retail Media has resulted in its widespread popularity surge. As an increasing number of retailers introduce their own Retail Media services, advertisers now have plenty of options to choose from.
Additionally, several Retail Media networks are venturing into the realm of Demand-Side Platforms (DSPs), providing even more sophisticated and intricate methods for connecting businesses with consumers. As a result, choosing the right Retail Media network has become more complex than never before.
Here are 10 factors to consider before making a decision on a Retail Media Network.
- Target audience reach. Evaluate the network’s reach and whether it aligns with your target audience demographics and geographic locations.
- Ad format options. Consider the available ad formats offered by the network, such as display ads, sponsored product listings, video ads, etc., and determine which formats are most effective for your goals.
- Network visibility. Assess the visibility and prominence of the network’s advertising placements to ensure your brand receives sufficient exposure and stands out among competitors.
- Data and targeting capabilities. Investigate the network’s data and targeting capabilities, including the use of first-party data, audience segmentation, and retargeting options to guarantee your ads reach the right audience.
- Platform integration. Check whether the network seamlessly integrates with your existing marketing and advertising platforms to simplify campaign management and data integration.
- Measurement and analytics. Determine the network’s measurement and analytics capabilities, including tracking impressions, click-through rates, conversions, and other key performance metrics that gauge a campaign’s effectiveness.
- Brand safety measures. Assess the network’s brand safety measures and protocols to ensure your brand’s ads are displayed in appropriate and reputable environments, free from fraudulent or harmful content.
- Pricing and budgeting. Understand the pricing structure, bidding options, and overall costs associated with the network, verifying that it aligns with your budget and provides a satisfactory return on investment.
- Flexibility and customization. Evaluate the level of customization and flexibility the network offers in terms of ad placements, targeting options, and campaign optimization.
- Industry expertise and support. Consider the network’s industry expertise, customer support services, and best practices..
In the post-cookies world, Retail Media is a new hope for businesses seeking effective advertising strategies. By leveraging first-party data and personalized targeting, Retail Media offers a way to navigate the changing landscape and maintain successful marketing campaigns in the absence of third-party cookies.