Retail Media Networks: Present And Future
Hardly a week passes without report of another retailer introducing its own media network, or news that an existing media network is expanding its capabilities.
With the growth of e-commerce, retail media has emerged as one of the fastest-growing sectors in advertising, projected to surpass $231 billion by 2030, according to Criteo, in part because two-thirds of online product searches start on retailer sites and brands can leverage retail media networks (RMNs) to connect with consumers directly at that point. “Retail media is quickly evolving into a full-funnel experience, extending beyond just sponsored ads to onsite display and offsite ads on the open web. This convergence of performance and brand awareness allows for a unified view of the consumer journey, while also providing the holy grail of advertising: closed-loop measurement,” explains Melanie Zimmerman, General Manager of Global Retail Media at Criteo.
Paul Brenner, SVP Global Retail Media at Vibenomics, an in-store digital advertising provider, says, "The retail media landscape is a multifaceted marketplace. While this diversity offers brands a wealth of options, it also creates a complex environment to navigate. The lack of standardized data and reporting across different RMNs makes it challenging to compare performance and optimize media spend effectively.”
He considers the “stark differences” between GoPuff, Walmart Connect and CTV integrations: GoPuff's focus on quick commerce presents opportunities for brands to target impulse buyers with targeted ads at the point of purchase. Walmart Connect, on the other hand, offers a broader reach to Walmart's vast customer base through various placements, including search, product pages, and homepage banners. CTV integrations, while providing premium video ad placements, often require a different creative approach and targeting strategy.
To effectively leverage these various opportunities, advertisers must carefully consider their objectives, target audience, and the unique capabilities of each RMN, explains Brenner. He adds, “A data-driven approach, coupled with a deep understanding of the nuances of each platform, is essential for maximizing ROI in this dynamic landscape.”
Also weighing retail media networks at delivery companies and Walmart and considering connected television (CTV) is Matt Voda, CEO of OptiMine. He says that for GoPuff specifically, the opportunity may be seen by the brand as a more purely incremental sales driver since GoPuff stores its own inventory as opposed to a Walmart Connect where the brand is likely already selling their products in Walmart stores: “The targeting options are very precise and allow the brand to match their own customer databases with the retailers' to serve ads only to those consumers they want to reach.”
On the other hand, Voda points out that for liquor companies, “The use of marketplaces such as InstaCart or DoorDash allows them to spend advertising money without violating regulations that prevent them from spending on ads directly with the retailer. So there are more growth opportunities for brands that would otherwise be shut out of advertising directly with their retail partners.” Then, CTV provides brands targeting options that aren't available in linear TV, and it also can solve a problem when the RMN has run out of onsite inventory in its own owned properties and placements.
Eleanor Hayden, Founder and CEO of Hayden Consultancy and an advisory partner to Koddi, the retail media network that built GoPuff ’s white-labeled platform, notes that GoPuff differentiates itself with the unique ability to daypart, allowing advertisers to target users based on time of day. Where Walmart sets itself apart is with an Ibotta integration and Offsite Display Ads in partnership with The Trade Desk. And, adds Leah Logan, General Manager of Retail Media at Inmar Intelligence, Walmart is “absolutely prioritizing past purchase first but in the past year they have released conquesting, which is a strategy where competitors can bid on one another’s brand level keywords.”
Hayden elaborates that, “Ibotta syndication presents a tremendous opportunity for small brands to quickly establish relevance on the platform, as they are likely to sell more units when an offer is attached. As their relevance grows, organic sales increase, and bid prices decrease.” This is a complement to Walmarts Everyday Low Pricing model. For Walmart, as well as for Target and Kroger, Hayden likes CTV, especially when a demand side platform can help narrow down target market and demographics with considerable precision.
Jorge Argota, founder of an agency bearing his name, is excited about the CTV integration across RMNs, which he says is bridging the gap between traditional TV advertising and digital retail media. “For example,” Argota explains, “Walmart’s partnership with The Trade Desk is giving brands new ways to reach consumers through CTV and create a more immersive and interactive shopping experience. Being able to serve ads on CTV platforms and then measure their impact on both online and offline sales is a big deal.” And, as Mike Merna, Senior Director of Commerce Media at Yahoo!, says, “It's a significant step beyond traditional display ads and sponsored product listings, particularly for marketers who want the story-telling capabilities of TV, but with more audience targeting precision."
Looking ahead, Gil Phipps, Senior Vice President of Global Customer Solutions at Advantage Solutions, predicts we will see retailers looking at RMNs as a key revenue driver, and one that can help smaller and mid-size retailers avoid further consolidation. “They are going to need some help to remain competitive. I anticipate seeing outside companies focus [on] helping these smaller retailers build out their own retail media networks, with the hope to help bridge the already big gap between smaller and larger retailers.
“In 2025, we expect to see more RMNs include in-store (both digital and physical signage), CTV, and creators as vital parts of their media strategy,” says Logan. “These channels provide more opportunities to unlock full-funnel advertising, particularly upper-funnel brand marketing efforts, unlocking the bigger budgets held by national brand marketing teams that RMNs are looking to win,” she adds.
Consistent with this, Renee Caceres, Head of Retail Media at StackAdapt, points out that, “The fastest growing RMNs are prioritizing off-site audience extensions... over half of advertisers who currently activate off-site advertising plans to increase their spend over the next year with a projected growth of 163% for retail media display ad spend between 2024 and 2028.” This is because, Caceres explains, onsite inventory is limited so advertisers with the biggest budgets for bidding will win out, whereas CTV and other offsite media can increase reach and scale, especially when self-service options for smaller businesses exist.
Examples of off-site media options provided by Andy Howard, Senior Commerce Media Director at Mars United Commerce, include social static and video ads, including shoppable recipe ads on Pinterest, a CTV ad including a call to action to try a new product and a QR code to shop online where the shopper can add the item to their shopping cart on their phone, digital out-of-home, and in-store displays.
Worth watching, says Zimmerman, is that “A mature retailer will boast advanced full-funnel capabilities, offer a blend of managed and self-service options and have established demand connections with indirect partners. In contrast, retailers in earlier stages typically focus on managed services and direct sales.” An added layer of differentiation is the media mix: e-commerce-driven retailers prioritize onsite advertising, while those with a robust brick-and-mortar presence often lean towards offsite digital media. “Understanding these nuances is key to navigating the increasingly crowded retail media landscape,” Zimmerman cautions.
And, it will be key to creating a more connected consumer experience. “RMNs give retailers and advertisers the opportunity to create a truly seamless journey by connecting consumers’ online and in-store interactions,” Logan explains. An example she provides is that a consumer may encounter a product through creator content online, then see that product later in-store in dynamic displays with a discount attached, connecting and enhancing their overall shopping experience. “This is a type of interconnectivity that we don’t—and won’t ever—see in any other channel.”
This article was originally published by Forbes on 10/21/24.