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The rise of retail media networks: A new frontier of advertising

May 07, 2024 - Alyssa Wolfe
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The rise of retail media networks |


While the thought of retail media networks might not set your heart racing, they have the potential to be a game-changer in the world of advertising. They’re an emerging tool full of potential opportunities and influence.

Given the current surge of ecommerce and online advertising, retail media networks offer some unique benefits, from fine-tuned targeting to excellent ROI. Before deciding whether you want to explore the abilities of a retail media network, it’s helpful to learn what it is and its emerging role in advertising.

What is a retail media network?

A retail media network is a digital advertising platform that retailers operate to monetize their online presence. Retail media networks offer brands advertising opportunities. These networks leverage the vast amount of shopper data collected by retailers to target ads more effectively and drive higher conversion rates. Through sponsored product listings, display ads and other formats, brands can reach consumers at various stages of the purchasing journey, from product discovery to final purchase. Retail media networks give retailers an additional revenue stream while offering advertisers a highly targeted and measurable way to connect with their target audience.

How do you advertise on a retail media network?

If you understand the concept of in-store advertising, think of a retail media network as its digital counterpart, operating within an online store. These networks leverage the rich first-party consumer data collected by retailers to target ads effectively. The retailer that operates the network can promote its own products or allow other brands to advertise to customers visiting their site. Ads are strategically placed on key pages with high traffic, including home pages, product detail pages, category pages and more.

Popular retail media networks

Retail media networks are growing in popularity. Saks and Nordstrom have recently launched their own retail media networks; Saks intends to cater to luxury brands and shoppers, and Nordstrom with its notable customer service in mind. However, other retailers dominate the space, having been at it for a while. This includes:

  • Amazon
  • Walmart
  • Kroger
  • eBay
  • Instacart
  • Home Depot
  • Target
  • Wayfair

The increasing importance of retail media networks in advertising

The rise of retail media networks has ignited excitement in advertising and marketing. It has marked a pivotal shift in digital advertising models. Retail media is considered the third wave of digital advertising, following search and social media. It’s reshaping the industry with its potential. Part of the attraction is driven by the decline of traditional TV viewership and the impending demise of third-party cookies. These marketing disruptions have allowed retail media to emerge as an opportunity.

Retail media networks aim to unlock previously untapped revenue streams within existing retail channels. By leveraging rich first-party consumer data, retail media offers advertisers a direct connection to audiences with high purchase intent—in other words, actual shoppers. This convergence of data and consumer engagement fuels the rapid growth trajectory of retail media networks. Unlike traditional digital marketing channels marred by escalating costs and stringent restrictions, retail media offers a direct line to consumers, fostering deeper engagement and more meaningful interactions. Advertisers, recognizing the effectiveness of this approach, are increasingly diverting their marketing budgets towards retail media networks, drawn by the promise of enhanced targeting precision and tangible ROI.

In 2022, global retail media revenue soared to $101 billion, accounting for a substantial chunk of global digital advertising expenditure. GroupM suggested that retail media advertising will witness a staggering 60% growth by 2027, outpacing the overall growth rate of digital advertising.

The rapid ascent of retail media can be attributed to its ability to bridge the gap between retailers and advertisers, offering a platform where consumer insights meet marketing objectives. As traditional advertising models undergo profound transformations, retail media networks promise a new avenue for targeted, data-driven advertising.

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Retail media network challenges

Brands must consider potential challenges and future issues with a retail media network. These are:

Ad saturation: With multiple brands vying for attention on retail media networks, there's a risk of ad fatigue among consumers, which can decrease the effectiveness of advertising campaigns.
Data privacy concerns: Since retail media networks rely on consumer data for targeting, there are heightened concerns about data privacy and compliance with regulations like GDPR and CCPA.
Competition and pricing: The increasing popularity of retail media networks has led to heightened competition among advertisers, potentially driving up advertising costs and making it challenging for smaller brands to compete.
Attribution and measurement: Measuring the effectiveness of advertising campaigns on retail media networks can be complex, which may make it difficult to attribute sales directly to specific ad placements, leading to uncertainty about return on investment.

Best practices for successful retail media network campaigns

Successful retail media network campaigns require careful planning and execution. Like any marketing strategy, brands must set clear objectives and goals, use practices to achieve them. To develop successful campaigns, take the following steps:

  • Identify and segment your target audience based on demographics, behavior and purchasing patterns to make sure your ads reach the most relevant consumers.
  • Develop visually appealing and engaging ad creatives that resonate with your target audience and effectively communicate your brand message.
  • Choose strategic placements for your ads within the retail media network, such as high-traffic pages or relevant product listings, to maximize visibility and engagement.
  • Regularly monitor the performance of your campaigns, analyze key metrics like click-through rates and conversion rates, and adjust as needed to optimize results.
  • Align your retail media network campaigns with your broader marketing objectives and strategies to ensure consistency and maximize impact across all channels.
  • Maintain compliance with data privacy regulations by obtaining necessary consent from users and adhering to guidelines such as GDPR and CCPA to protect consumer privacy and trust. for your advertising, marketplace and growth marketing needs offers solutions that amplify your advertising, marketplace and growth marketing efforts. Our experts can help you navigate the complexities of retail ecommerce and optimize your strategies. Talk to our team today to learn more about our commerce solutions.  

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