Brands need data. Retailers have data. Bring the two together and you have a match made in advertising heaven.
With third-party cookies and mobile advertising IDs disappearing fast, brands must find new ways to reach people with meaningful experiences. At the same time, retailers are sitting on a wealth of first-party customer data from omni-channel transactions and loyalty programs. The almost inevitable result is a surge in solutions that enable brands to use retail data to run relevant, personalized ad campaigns across ecommerce sites and beyond.
Brands are embracing this trend, and almost three-quarters of CPG brands that sell through retailers say they already assign budget to retail media networks (RMNs). Overall, US digital retail media ad spend is expected to grow over 26% year-on-year to exceed $50 billion in 2023.
But there is one question mark hanging over retail media: with rapid expansion bringing increasing fragmentation and complexity to the landscape, how can brands scale across multiple networks and make sure the retail data opportunity is sustainable?
Retail media is accelerating
RMNs aren’t exactly a new addition to the media landscape. Larger retailers such as Amazon, Walmart, and Target have encouraged brands to buy display ads, sponsored search results, or featured product placements for years. These ads allow brands to take prime position on the digital shelf and get closer to shoppers during the consideration and purchase stages of their journey, as well as to measure closed loop, deterministic, attributed sales.
Now, RMNs are expanding beyond these offerings. As retailers start to appreciate the immense value their first-party data holds in the privacy-first era, we’re witnessing an RMN boom. Established networks are significantly expanding capabilities and offerings, and new retailers are launching brand new offerings with self-serve options, where brands can tap into retailer first-party customer data to reach audiences with addressable advertising.
Retail media models are evolving
Most RMNs currently offer coupled data and inventory. This means brands can reach audience segments across the retailer’s network of approved publishers, facilitated by private marketplaces, or PMPs.
But a few retailers are starting to decouple data from inventory, which enables brands to reach the customers within a retailer’s audience segment across a wider range of inventory and channels. Some retailers are building their own DSPs, including Walmart Connect which recently launched its DSP in partnership with The Trade Desk. Others are launching decoupled data segments, with Walgreens recently announcing it will offer data segments for brands to use via OpenX and The Trade Desk.
These RMN developments deliver exciting opportunities for brands to do off-site audience extension, engaging retailers’ customers across a variety of channels and formats such as display, video, and even connected TV. With the collapse of the traditional sales funnel, the ability to reach shoppers outside of retail environments with engaging, interactive ad units – such as shoppable video or carousel display ads – is incredibly powerful.
And the evolution of retail media is only just beginning. Right now, the majority of RMNs only allow endemic brands to access their data for advertising. But many are expected to open up to non-endemic brands by the end of 2022, bringing a raft of new use cases.
The evolution and expansion of RMNs is welcome news for brands in need of this type of
data. However, this ongoing diversification of retail media models is already producing an unwieldy ecosystem that is tough for brands to navigate.
Enabling a unified approach
Given the enormous potential of retail data, it makes sense for brands to scale campaigns across multiple RMNs. But doing so is complicated and time consuming because each one works in a different way.
Most RMNs currently operate in silos, like mini walled gardens. They all use different platforms and, as discussed above, they offer access to their data and inventory in different ways. They report at their own cadence, and through various means. They also operate a wide range of pricing models. Assuming RMNs follow a similar maturity curve to other parts of the adtech ecosystem, there is further fragmentation to come before the sector starts to consolidate.
To get true value from retail media programs, brands need a way to manage campaigns holistically across multiple networks. At Matterkind, we are rising to this challenge through our commerce outcomes solution, which is designed to enable brands to run a unified commerce program across all relevant RMNs.
We leverage the RMNs’ self-serve offerings to message relevant audiences using ethically-sourced data across addressable channels, and layer in engaging shoppable ads. Through our integrations with the buying platforms, we have the ability to standardize reporting, giving brands a single-source view of how their program is performing across retailers. We optimize the programs in-flight, using the deterministic, closed-loop reporting provided by retailers, in order to give brands deep insights on what is driving sales and return on ad spend. With a holistic, unified view of multiple RMNs, brands can optimize campaigns, both within individual retailers and across the different networks, in order to maximize that return.
First-party data is the way forward
In a world without third-party cookies and mobile advertising IDs, first-party data is the next frontier for brand advertising. Most brands are already building out their own data assets in an attempt to own the customer relationship. While retail media activities don’t directly generate first-party data for brands, they do perfectly complement these efforts. RMNs are particularly effective for accessing new audiences and prospects that won’t be found in a brand’s database – especially those that already buy from competitors – and converting them into customers.
RMNs are a highly effective way for brands to tap into the valuable first-party data retailers have in abundance. Once they can manage campaigns holistically across the rapidly expanding landscape, retail media can become far more sustainable, allowing brands to reach the right audiences, at scale, with meaningful experiences.