According to eMarketer, retail media ad spending will continue its tremendous growth and shows no signs of slowing, rising from $45.15 billion in 2023 to $106.12 billion by 2027. These numbers speak to the power of retail media advertising and the opportunities they create for brands and agencies everywhere.
What is Retail Media Advertising?
Retail media advertising is the buying of media on a retailer’s media network. These retail media networks enable retailers to monetize their digital properties — websites, apps, and email newsletters — by selling advertising inventory to third-party brands.
Retail media networks provide brands with unique and previously unattainable advertising placements. Additionally, and perhaps most importantly, retail media networks provide first-party audience and shopping data that help marketers reach their desired audiences with greater precision, personalization and relevance, and enables marketers to come away with powerful insights.
Let’s take a closer look.
Tap into First-Party Data
Retailers have access to troves of consumer data — like online and offline purchase history, home addresses, birthdays, and purchase frequency for example — which they’ve collected through loyalty programs, store credit cards, and online accounts. When compiled, this information paints a clear picture of a person’s brand and product preferences, interests, and even possible next purchases. Let’s look at an example to understand how this works.
Melanie is a regular Walmart shopper and a member of the Walmart+ rewards program. She makes weekly trips to a store location in Austin, Texas with routine purchases of all gluten-free groceries, gardening supplies, mystery books, and eco-friendly cleaning products. Additionally, she usually makes online purchases on Walmart’s website for large-breed dog food. With this information, Walmart can assume that Melanie is a homeowner (garden supplies), living in Austin, Texas (in-store shopping habits), owns at least one dog (dog food purchases), and is environmentally conscious (eco-friendly cleaning products).
This deterministic data is what makes retail media advertising so appealing to savvy brands and advertisers. It is this data that enables advertisers to connect with relevant audiences to promote products and services aligned to the consumer’s preferences, interests, and values — and drive conversions.
Deliver improved relevance and personalization
With access to shopping data as specific as the flavor of ice cream a consumer likes or the cadence at which they purchase new toothpaste, RMNs enable brands to take their targeting to the next level. This data provides the framework to deliver personalized offers, ad creatives, coupons, or discounts tailored specifically to a customer for greater impact and engagement.
Let’s go back to our example with Walmart and Melanie. Below are a few examples of how advertisers can use retail media advertising to reach Melanie with relevant ads and offers.
- A new dog-food brand wants to promote its treat suited for medium and large-breed dogs like Melanie’s. Through a RMN, the brand can reach Melanie with an offer for 10% off her first purchase.
- Melanie is a regular gardener. By partnering with a retail media network, a garden supply company can showcase the best products for Melanie based on the specific season and climate in Austin, Texas.
- An eco-friendly CPG brand wants to reach likely customers. By leveraging a retail media network the CPG brand can tap into the RMNs first-party data to reach Melanie, and those like her who’ve purchased other eco-friendly products.
Reach ready-to-buy consumers
The way consumers search for products and services has changed; approximately 63% of consumers visit Amazon or Walmart.com for initial product research. So, while consumers browse and shop, advertisers can reach them in a ready-to-by mindset. There really is no better time to get your brand in front of consumers than when they are just one click away from converting. With retail media advertising, advertisers can capitalize on the moment to drive business.
Gain detailed and thorough insights and analytics
Whether impression, click, or sale, all the metrics occur in the same platform making it easy for advertisers to better track and understand the ROI of the RMN ads.
New approaches for new consumer habits
With access to more devices and screens than ever, consumer shopping habits have evolved — from the way they research products to the ways in which they purchase them. Advertisers can ensure they reach and engage their desired audiences with relevant and personalized digital experiences by leveraging the power of first-party data and retail media advertising.
Interested in learning more about the power of Retail Media Advertising? Reach out to our team to learn more.