The rise of media networks in the digital world marks a turning point in the way brands engage with customers directly where they shop. With retail media networks, brands can have more visibility and customer engagement while using the retailer’s digital platform to serve targeted ads to shoppers. In this article, we’ll discuss the importance of retail media networks and how they can be transformative for your brand’s reach and help you reach marketing milestones. For the fundamentals, refer to the first blog in this series on the basics of retail media networks.
A retail media network connects retailers with advertisers by allowing brands to place ads directly on ecommerce sites, apps and even in brick-and-mortar stores. These networks use extensive customer data to precisely target ads to the right customers. The result: a higher likelihood of sending ads to customers that are ready to make a purchase. Key components of retail media networks include:
What are the advantages of using retail media networks for retailers and brands?
The advantage of retail media networks for retailers is twofold: monetization of their websites and access to valuable customer data. Online stores have traditionally been used for the sole purpose of selling products. By turning their online stores into advertising spaces, retailers can generate significant new revenue streams. For example, a major retailer like Walmart or Target can offer various placement spots across their websites and app to brands at a premium rate due to high traffic volumes.
What’s more, the data collected from customer interactions with ads allows retailers to gain valuable insights into shopping habits, preferences and trends. This data can be used for everything from improving targeting for future ads to optimizing the overall shopping experience. How exactly does this look in practical terms? If data shows high click-through rates for kitchen-appliance ads, the retailer might then decide to promote these types of products more across its platforms or increase inventory levels in response to these observations.
For brands, retail media networks serve as advertising options that are likely to get them a lot more bang for their buck in terms of ad spend. Why? By advertising on a platform where consumers are already in a shopping mindset, the chances of conversion are much higher. A brand like Nike, for example, could use a retail media network to target customers already searching for sneakers or athletic wear on the retailer’s site, showing ads that are extremely relevant to the shopper’s current buyer journey.
The customer data collected by these networks also allows brands to serve more personalized and relevant advertising. Using this data, brands can create tailored messaging based on a consumer’s shopping history, interests and behaviors. For example, a coffee brand could target ads for coffee machines to people who have previously purchased coffee.
Retail media networks are rapidly expanding, with major retailers like Amazon, Walmart and Target at the top of the list of retail media networks, and many more following suit. These networks offer a lucrative income stream for retailers and advertising by placing advertising directly into shopping experiences that are already in action. This integration of ads into real-time shopping increases the likelihood that ads are not just seen, but acted upon, given their proximity to the purchase point.
The growth of retail media networks is being driven by several recent trends:
These trends show that retail media networks are constantly evolving to incorporate technological progress and meet customer needs, allowing for more effective advertising.
As online shopping continues to capture more and more spend worldwide, retail media networks, too, have grown in popularity among brands looking to capitalize on this boom in online shopping. The connection is derived from the mutually beneficial cause and effect of the following sequence of events:
The inherently symbiotic relationship between online retailers and brands who use them is changing the world of digital advertising.
While the list of retail media networks continues to grow, the top 8 retail media networks according to Adweek are:
Using retail media networks for programmatic advertising is becoming table stakes. Far from a passing trend, they are changing how marketing and advertising strategies for brands take shape and are becoming critical pieces of the media mix for ecommerce. However, it’s clear that these networks are more than just advertising space; they allow the advertising spaces to serve as strategic and data-driven influences on the customer’s shopping journey.
To effectively use retail media networks, brands should:
In order to maximize ROI from using retail media networks as advertising platforms, campaign managers should think strategically when it comes to ad formats and data use.
Retail media networks have given brands an effective means of finding new customers. However, they are not without pitfalls and challenges for both brands and retailers. Some common obstacles for brands are:
Some common obstacles for retailers are:
As retail media networks continue to evolve, they represent a critical component of modern digital marketing strategies, particularly for retail brands. By understanding how these platforms work and how to use them optimally, brands can see significant shifts in their overall performance.
Cart.com can help you develop a tailored retail media network strategy by analyzing market trends and identifying target audiences. We'll optimize ad placements and creative content to maximize visibility and engagement. Our data-driven insights and performance metrics refines campaigns and ensure continuous improvement. To learn more about Cart.com's marketing services, contact our team today.