Retail media is exploding, in no small part due to retailers such as Target, Walmart, Amazon, and Lowes who offer advertising opportunities to other brands as a way to monetize their sites. According to eMarketer research, spending on retail media will top $140 billion in 2024.
There are a few key reasons for this upward trajectory. Retail media allows advertisers to target consumers while they actively shop, making it the ultimate performance tool.
And, in the absence of third-party cookies, retailers often make their first-party data available for targeting purposes: retailers know who their shoppers are and have their purchase history on record. That’s powerful insight for advertisers that want to introduce their brands to users with a history of shopping in a specific product category (e.g. vegan food).
What’s more, let’s say you’re a brand and you target a shopper with an ad for sneakers. The retailer will know if that shopper clicks on your ad, adds the product to her cart, and proceeds to purchase it. It’s deterministic attribution — aka, the marketer’s nirvana!
So let’s take a look at the retail media ecosystem to see how it can fit into your advertising plans in 2024.
Key Players
In the retail media world, retailers act as publishers, selling advertisers the opportunity to target ads for products as the shop. In many cases, the retailer will hold an auction for an ad based on the contents of a shopper’s existing basket and current shopping behavior.
You can probably guess who the dominant player in the space is. According to a DoubleVerify survey of 4,000 marketers, Amazon Advertising pretty much owns the space. In fact, Amazon was ranked the #1 most adopted RMN across 3 of the 4 markets polled: US (51%), UK (71%), and Germany (51%).
But there are plenty of others, such as Walmart Connect, Target Roundel, Disney Advertising, and Lowes’ One Roof Media.
These sites, resemble full-blown marketplaces more than they do traditional retail e-commerce stores. They attract millions of consumers each day, many of whom are pre-registered. What’s more, their advertising ad formats, targeting based on machine learning, all of which allow you to target specific product categories and consumers, letting you reach them while their interest is piqued.
The Tech Platforms
We don’t want to give you the impression that only the big retailers can participate in retail media. There are multiple tech providers like Criteo and Moloco that offer turnkey solutions that allow smaller sites and apps to spin up a retail media network with ease. These solutions offer everything from advertiser onboard and management, multiple ad units, machine-learning and a bidding ecosystem for selling ads.
The Challenges
While retail media is an exciting channel, it’s not without its challenges. According to the DoubleVerify survey mentioned earlier, there are four top concerns regarding the adoption of retail media: limited targeting options (not every retail media network offers the same functionality), constrained on-site ad space, high costs, and the absence of ad quality verification by third parties.
And while retail media delivers strong results, they do come at a higher price. According to DoubleVerify, “Nearly half (48%) felt that RMN cost-per-mille (CPM) rates are higher than other channels, with this sentiment being particularly strong among agency executives, as 58% echoed this view. However, when asked about the return on ad spend (ROAS) of retail media, 61% of buyers said they believe RMNs perform better than other channels.”
You Need an Expert to Help You Navigate the Retail Media Ecosystem
Paragon Digital Services can help you ensure success in your retail media campaigns. By executing thousands of campaigns, our teams have acquired the kind of specialized knowledge and experience required to navigate the intricacies of the retailer platforms, targeting strategies, and campaign optimization techniques.
We can also develop sophisticated targeting strategies based on purchase behavior, browsing habits, and other relevant data points within the retail media landscape.
Most importantly, we can help you optimize campaigns across the multitude of retail media platforms, ensuring you or your clients reach the right audience at the right time and maximize return on ad spend (ROAS).
Get Started
Learn more about our end-to-end retail media services today. Or get in touch.
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