Consider this: Digital ad spend took 14 years to go from $1 billion to $30 billion. Even social media took 11 years to grow as an advertising channel.
Retail media’s journey to the top? Just five years.
No doubt, retail media is BIG and chock full of opportunity. That’s why we partnered with Retail Touchpoints in its latest report, The Revolution of Retail Media: Powered by Data, RMNs Offer Full-Funnel Advertising. The report charts retail media’s meteoric rise while addressing three major considerations the industry must address to take the advertising channel from thriving to legendary.
Retail Media’s Meteoric Rise
Retail media is no fad. Insider Intelligence even crowned it the “third big wave of digital advertising” (behind search and social) in a November 2022 article. The facts speak for themselves:
- Retail media is predicted to reach $45 billion this year alone.
- One-quarter of retailers are generating more than $100 million in revenue from their media networks.
Yet, the sector is not without its growing pains. For retail and media to work hand-in-hand requires a full-funnel offering, physical store consideration and universal measurement standards that remove brand pain points.
“Off-Site” is Retail Media’s New Frontier
The true promise of retail media is its ability to use retailers’ first-party data to target ads across the web. Moving beyond retailers’ websites creates a full-funnel, omnichannel offering that increasingly includes connected TV (CTV) and social commerce. For instance, Lowe’s is in the process of integrating with Yahoo’s demand-side platform (DSP), and Kroger is expanding its offering into CTV.
“Leveraging multiple ad types and multiple channels gives you the ability to become more strategic with your campaigns, target consumers across the entire buying funnel and deliver your potential customers the right product ad, in the right place, at just the right time,” said Bradley Hearn, Product Marketing Manager at ChannelAdvisor, a CommerceHub company.
This has a huge impact on how brands build their campaigns. Whereas brands previously drove awareness at the top of the funnel with videos or social campaigns, off-site retail media via CTV or social gives brands a way to immediately understand how consumers are reacting and engaging.
Physical Stores Are Retail Media’s “Last Mile”
Perhaps surprisingly, advanced RMNs are going back to retail’s first love: the store. That’s because many major retailers have something Amazon doesn’t — a huge physical footprint. Retailers with higher monthly audience reach in-store versus online includes giants like:
- Home Depot
- Dick’s Sporting Goods
In-store media may now include front-of-store signage, TV walls, end caps, drop-down screens, smart shelf labels and smart cart screens. One of the reasons in-store retail media is so sought after is because it serves as a replacement for other offline advertising whose audiences are waning, like TV ads. While it has become harder and harder to reach the coveted 18-to-40-year-old demographic through linear TV, these audiences do still venture in-store.
Retail Media Still Needs Substantial Standardization
Every RMN carries its own unique elements and requirements, making it difficult for brands to launch on more than three to five at a time. More than half of brands agree, according to an Association of National Advertisers report. For 57% of marketers, lack of standardisation across platforms is a big challenge.
Luckily, the Interactive Advertising Bureau (IAB) and interested brands like Unilever are working to devise a set of retail media measurement standards. The group is also pushing for the same level or reporting granularity the average programmatic platform delivers.
One other major piece to the puzzle? Making it easier for brands to manage their total RMN investment holistically across networks.
ChannelAdvisor gives brands a way to streamline digital marketing campaign setup, management and tracking from a centralized platform for higher sales growth and return on ad spend. As RMNs take off and brands have multiple channels and campaigns to monitor, ChannelAdvisor provides a way to improve visibility across the landscape while efficiently monitoring performance. If you need guidance implementing retail media ads that convert, ChannelAdvisor’s Managed Services team can help. Through our longstanding relationship leading retail networks and our extensive experience in the market, our experts can show you what works.
Discover what else is in store for RMNs in 2023 by downloading the full report, The Revolution of Retail Media: Powered by Data, RMNs Offer Full-Funnel Advertising.