May 23, 2024
Retail Media Network

Connecting Brands and Shoppers: Retail Media Networks

Introduction

The traditional way of advertising which involved brand messages being broadcasted on television, print, radio etc. is gradually making way for more targeted and personalized marketing through retail media networks. Customers are increasingly spending more time online shopping and browsing products which has led to the emergence of retail media as a huge opportunity for brands to connect with customers. In this article, we explore what retail media network is, how it is transforming digital advertising and its impact on the overall marketing landscape.

What is Retail Media Network?

A Retail Media Networks refers to the advertising space owned and operated by major retailers where brands can promote their products and messages directly to the customers of those retailers. This advertising space includes areas like product pages, category pages, emails, search ads, banners etc. on the retailer’s website and app. Major retailers like Walmart, Target, Amazon,Flipkart etc. have built their own media networks where brands pay to advertise similar to how advertising works on Facebook or Google. This allows retailers to monetize the enormous customer attention on their platforms while giving brands targeted access to the relevant customers.

Advantages of Retail Media over Traditional Advertising

One of the major advantages of retail media is the level of targeting and personalization it enables compared to traditional advertising formats. Since the ads appear within the path of purchase on retailer sites and apps, they are much more relevant to the customers. Retailers also have valuable first party data about customers’ browsing behavior, purchase history etc. which helps brands target the most receptive audiences. This level of targeting enhances engagement and drives better returns on ad spend for brands. Retailing media also provides the benefit of many marketing channels under one roof. Brands can promote across product pages, category pages, search ads, video content, banners etc. within the retailer’s owned properties.

Emergence of New Ad Formats

With retail media evolving as a major marketing channel, new and innovative ad formats are emerging to make advertising more interactive and immersive for customers. For example, retailers are allowing brands to take over sections of category pages through takeovers or brand blocks. Dynamic product ads powered by AI are generating multiple product images, attributes and videos based on customer searches or page visits. Video ads are gaining more prominence with in-feed and in-banner video allowing brands to tell product stories more engagingly. Interactive experiences like AR filters, 360 degree views are also coming up as ad units on retail media networks for categories like apparel, furniture etc. These new immersive formats are helping drive better brand messaging and customer experience.

Heads and Tails of Retail Media

While retail media presents huge opportunities for targeted digital marketing, there are also certain challenges brands need to be aware of. Since retailers control the platforms, they decide pricing and policies for advertising inventory which can fluctuate. Dependence on a few large retail platforms also means lack of diversification in media spending. Measuring ROI and true impact of campaigns can sometimes be difficult given the closed ecosystems of retail sites. Data ownership and privacy concerns are growing with retailers having access to enormous customer data. However, as retail media matures, solutions are emerging around standardization, view-through conversions tracking and guarantee-based models to address some of these issues. If leveraged strategically, retail media can become a major pillar in performance-driven brand marketing.

Impact on Agency Models and Strategies

The rise of retail media is compelling marketing agencies to evolve their service offerings and strategic focus. Agencies need to build specialization and credentials around retail media optimization, campaign management on retail networks and getting brands the most out of limited on-platform analytics. Multi-channel campaigns involving both retail media and traditional online advertising will require tighter integrations. Agencies also need to help brands navigate issues around data access and ownership with major retailers. Performance and tech capabilities are becoming more important than just brand building expertise. Overall, retail media demands a new approach where the path to purchase becomes the focal point of all marketing activities rather than a standalone tactic. This is driving agencies to fundamentally relook their models, talent profiles and way of partnering with clients.

In conclusion, retail media networks have emerged as a big opportunity for targeted digital advertising given the time spent by customers online for product research and purchases. While still in development phase, retail media is already impacting the marketing landscape with new immersive ad formats and strategic implications for both brands and agencies. As the medium evolves further with standardization efforts, it has potential to disrupt traditional advertising models and become core to omnichannel performance driven marketing in the coming years. Both advertisers and retailers need to proactively shape the future of this evolving space through strategic partnerships and innovation.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it