Retail media has the potential to transform the way brands connect and interact with consumers, making it a powerful strategic asset for marketers.
In the rapidly evolving world of digital advertising, Retail Media Networks (RMNs) have emerged as a transformative force. RMN enable brands to buy advertising space across the retailer’s owned channels (such as its website, mobile app, or in-store screens) and paid media (with RMNs using first-party data to target relevant audiences across programmatic display ads, search, or social media). With either approach, RMNs use data and access to the consumer purchase journey to connect with consumers, measure the impact of the advertising that reaches them, and provide these measurements to the brands.
With RMN ad spending accelerating faster than nearly any other category, RMNs are becoming a cornerstone of advertising strategies. According to a recent IAS report, retail media is a top emerging media channel for marketers.
Retail Media Networks: A Key Pillar of Modern Advertising Strategies
The worldwide retail media ad spending is on track to increase by nearly $100 billion between 2020 and 2025. Its 21.8% rise this year will outpace growth rates in nearly all other forms of ad spending, demonstrating the growing importance of these networks. RMNs are transforming the advertising landscape, allowing brands to place ads directly in front of consumers who are in a shopping mindset. RMNs facilitate advertising across various digital channels, reaching highly engaged audiences. This approach is rapidly gaining traction, with RMN ad spending accelerating faster than almost any other ad category, second only to Connected TV (CTV). As consumer shopping habits continue to evolve, RMN sales are expected to grow significantly, capturing a larger share of overall retail sales. Consequently, RMNs are becoming essential to advertising strategies for brands aiming to maximise their reach and impact.
Access to unique first-party data
According to the BCG, brands want data-driven insights into customer behaviour (including about similar products consumers were purchasing and whether promotions were driving new sales or simply providing discounts for existing customers). They want to combine data and insights while respecting consumer privacy to strengthen their campaigns, enable effective ad performance, and reach a bigger audience. The ability to target consumers and fulfil their orders when advertising is effective is a huge value-add for brands.
Precision in Placement: Delivering Ads with Impact
RMNs provide brands with the opportunity to reach their customers in the right context and at the perfect moment and the ability to accurately measure the impact of an ad campaign. Consumers are most likely to pay attention to ads that promote sales or feature best-selling items, making these types of ads particularly effective on RMNs. Conversely, unrelated ads tend to be ignored, highlighting the importance of relevance in advertising content. According to the IAB Australia's ‘ Retail Media State of the Nation Report 2024’, the top three retail media objectives for advertisers include increasing sales (61%), acquiring new customers (52%) and supporting specific promotions (49%). RMNs offer the potential to measure in-store purchases, providing valuable insights into the efficacy of ad campaigns. Success can be gauged by comparing overall ad costs with revenue metrics such as advertising cost of sales (ACOS) and return on ad spend (ROAS).
Holiday Buying RMN Strategies for Advertisers
As the holiday season approaches, advertisers must adapt their strategies to protect ad spend and drive engagement. During this peak buying period, consumers are more likely to make purchases, presenting a significant opportunity for brands. To optimise their holiday campaigns, advertisers can collaborate with third-party measurement and optimisation platforms. These platforms offer several benefits:
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Quality impressions: Ensure that ads are viewable, served to real people, in brand-safe and suitable environments, and targeted to the correct geographic locations.
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Media Investment Control: Gain comprehensive insights at the campaign, partner, placement, domain, and app levels, allowing for precise optimisation and cost efficiency.
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Media Quality Solutions: Implement tools such as viewability measurement and contextual targeting to inspire consumer purchases and achieve key performance indicators (KPIs).
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Brand Safety and Suitability: Validate the safety and suitability of ad content adjacency protecting brand integrity.
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Data-Driven Decisions: Access deeper performance analyses and make faster, more informed decisions based on detailed data.
As the digital advertising landscape evolves, RMNs are set to play an increasingly crucial role in advertising strategies. By leveraging the power of RMNs, brands can optimise their ad spend, enhance consumer engagement, and achieve significant returns on their advertising investments.