Retail Media: The Future of Advertising
In today's competitive advertising world, brands are always looking for fresh ways to stand out and connect with their audience. Enter Retail Media. It might be a new term for some, but its promise is straightforward: offering brands a unique way to engage consumers and make a lasting impression.
So, what exactly is Retail Media? And more importantly, why should brands be paying attention? In this blog we will explain:
- What is Retail Media
- What are Retail Media Networks
- Why RMNs are Reshaping Retail Advertising
- Why Brands Need to Start Considering Retail Media
- What Are Popular Forms of Retail Media Ads?
- The Pioneers of Retail Media Networks
What is Retail Media?
At its core, Retail Media refers to brand advertising within the digital platforms of retailers. This could mean promoted products in search results, sponsored product listings, or even display ads on a retailer's app or website. The primary aim? To influence potential buyers at the most crucial phase of their shopping journey: the point of purchase.
Imagine you're a consumer searching for a hair conditioner on an online retailer's platform. Among the numerous options, a sponsored product catches your eye, bearing a brand you've been curious about. The integration of this advertisement in your shopping experience makes you more likely to consider purchasing the product. This seamless experience is the power of Retail Media.
What are Retail Media Networks?
When we talk about Retail Media Networks (RMN), we're venturing into a unique blend of AdTech cultivated by retailers themselves.
Essentially, RMNs are comprehensive digital systems encompassing a retailer's various platforms, from primary websites to mobile applications. Through these networks, brands are afforded the distinct opportunity to engage with consumers in a more targeted manner, directly within the context of their shopping environment.
This integration allows for a more informed and consistent interaction with consumers, supporting them throughout their decision-making and purchasing processes. In leveraging RMNs, brands can achieve a deeper understanding of consumer needs, resulting in more efficient and effective advertising campaigns.
Why RMNs are Reshaping Retail Advertising:
Though Retail Media might seem new on the advertising block, it's making waves, and advertisers are eagerly diving in. On average, they're spreading their interests across roughly four Retail Media Networks (RMNs). In fact, over the last year, 27% have transitioned their spending from one RMN to another with many industries and brands expected increase their ad spending in the retail media space to US$25 billion by 2023.
The magnetic pull of RMNs is hard to ignore. They're capturing a larger slice of the marketing pie, with brands keen on reaching consumers right where they're about to make a purchase. McKinsey's research underlines this trend, revealing that a whopping 73% of advertisers plan to boost their RMN investments in the upcoming year, accounting for an impressive 10-15% of their total media budget.
But what makes RMNs so irresistible? They blur the lines between shopping and advertising, perfecting customer interactions and giving brands an unmatched window into what makes consumers tick. As e-commerce continues to evolve, the strategic importance and value of these networks becomes even more pronounced, offering brands unique avenues to connect with their target audience.
Lets take a deeper look at how they offer this value.
- Increased ROI and RMNs: Ads displayed closer to the point of purchase often have a higher conversion rate. Coupled with the high performance of leading RMNs, brands can expect stellar returns on their ad spend. (such as five to ten times the return on advertising spend)
- Trust, Credibility, and the Power of RMNs: Trusted retail platforms boost the credibility of the brands advertising on them. This, combined with the effectiveness of RMNs, can lead to significant brand enhancements.
- Shifting Consumer Behavior and RMN Response: As online shopping continues to grow, brands that efficiently utilise RMNs will be poised to capitalise on these evolving consumer behaviours.
- Closing the Feedback Loop with RMNs: The direct insights provided by RMNs offer an unparalleled advantage, allowing brands to attribute sales directly to specific ad campaigns.
Why Brands Should Consider Retail Media
Retail Media can be a transformative force for brands when used correctly. Beyond the immediacy of heightened sales and product visibility, its true strength lies in fostering deep consumer connections.
By blending data-driven insights with immersive storytelling, Retail Media enables brands to curate hyper-relevant campaigns, seamlessly integrating their narratives into the consumer's shopping experience.
This approach not only propels purchasing decisions but also cultivates long-term brand loyalty, positioning brands at the forefront of consumer consciousness.
Lets take a look at some of the immediate benefits that Retail Media can offer brands:
- Deep Consumer Insights: Retail Media provides granular data about consumer preferences and behaviours. This wealth of information allows brands to tailor their campaigns, ensuring hyper-relevance and maximising engagement.
- Highly Targeted and Relevant Ads: Retail Media platforms offer brands access to rich first-party data. This means advertisements can be tailored based on a consumer's purchase history, search behavior, and preferences, making them more relevant and effective.
- Enhanced Brand Narrative: It's not just about showcasing a product, but telling a brand's story. Retail Media facilitates the weaving of these narratives seamlessly into the consumer's shopping journey, enriching their overall experience.
- Interactive Engagement: With dynamic ad formats and shoppable content, brands can move beyond traditional advertising. Consumers interact directly with brand content, fostering a deeper, more personal connection.
- Sustainable Growth: Beyond immediate sales, Retail Media plants the seeds for long-term brand loyalty. By offering memorable touchpoints, brands can foster a community of repeat customers and advocates.
- Meeting Consumers Where They Are: A majority of consumers begin their shopping journey with online research, often directly on retail platforms. With Retail Media, brands can position themselves prominently where the consumer is already looking.
What Are Popular Forms of Retail Media Ads
Within the expansive realm of retail advertising, brands are now harnessing a diverse array of ad formats tailored to the unique environments and touchpoints of both online and physical retail spaces.
These specialised ad types don't just elevate product visibility but also enhance the shopping experience for consumers.
Let's delve into a few of the most popular forms of retail media advertisements and their distinct advantages:
- On-site Display Ads: These are the banners or sidebar advertisements that users see when they visit a retailer's website. They're typically highly targeted, based on the user's browsing history and preferences.
- Sponsored Product Listings: When a shopper searches for a product on a retailer's site, certain items might appear at the top of the results, having been sponsored or paid for by brands to gain visibility.
- Digital Shelf Displays: In brick-and-mortar stores, endcaps and shelf-toppers are prime advertising real estate. Their digital equivalents are sections of a retail website that highlight specific products or promotions.
- Video Advertisements: Integrated within a retailer's online platform, these can play automatically when a shopper visits a page, giving brands the opportunity to deliver a more dynamic message.
- In-app Advertisements: Retailers with mobile apps offer another channel for brands. In-app ads can be banners, videos, or interactive content targeting mobile shoppers.
The Pioneers of Retail Media Networks
As the opportunity within the retail media space continues to grow, a host of powerful networks have risen to prominence. While we'll introduce some of the major players, it's worth noting that this arena is ever-evolving, with new platforms continually emerging to capture the potential.
Amazon Advertising: Undoubtedly one of the most dominant players, Amazon Advertising provides brands with a vast range of tools, from sponsored product listings to display ads, video ads, and more. Given the platform's immense traffic, advertisers can reach a broad audience, tapping into detailed consumer behavior insights that Amazon uniquely offers.
Walmart Connect: Leveraging the traffic both in its physical stores and its rapidly growing online presence, Walmart offers brands opportunities to advertise across various channels. Its unique omnichannel data provides insights into both online and in-store purchasing behaviour
Kroger Precision Marketing: This RMN taps into Kroger's vast customer base across its multiple grocery chains. Brands can make use of digital shelf displays, sponsored products, and even offline ads within physical stores, all backed by Kroger's detailed shopper data.
Target's Roundel: This media network utilises Target's rich shopping data to help brands craft personalised campaigns. Advertisers can deploy ads not only on Target's platforms but also on social media and other partnered websites.
Criteo Retail Media: Criteo, traditionally known for retargeting ads, has expanded into the retail media space. Their platform enables brands to reach consumers on numerous retailer websites, benefiting from Criteo's sophisticated personalisation algorithms.
Instacart Ads: With the rise of online grocery shopping, Instacart has positioned itself as a critical player. Brands can advertise directly on the platform, reaching consumers as they fill their virtual carts.
E-commerce is an intricate dance of innovation and opportunity. In this landscape, the merger of Retail Media and RMNs emerges as a strategic powerhouse for brands. It's more than just capturing attention; it's about crafting genuine connections with consumers. In a world where online shopping experiences evolve with every click and scroll, simply having a digital presence isn't enough.
Brands eyeing long-term growth and influence recognise that integrating Retail Media and tapping into RMNs is less an elective move and more a critical step in modern digital retail mastery.
Want to know how best to incorporate Retail Media into your marketing strategy, take a look at our best practice guide.