There are few things in the world more intimate than our shopping carts. From diapers and pet food to frozen food or toiletries, what we buy says volumes about who we are, how we spend our time — and what we really want in life. It’s invaluable first-party data.
Today’s online retailers are sitting on a gold mine of data about their customers — which is why it’s no surprise then that nine of the top 10 largest retailers in the U.S. are going in big for retail advertising, including Target, Kroger, Lowe’s, Best Buy, Walgreens and Albertsons. Digital natives like DoorDash, Instacart and Gopuff have followed Amazon into the online advertising business as well, making advertising on retail sites (also called retail media) the new hot channel for reaching engaged audiences that are ready to buy.
These retailers not only have verified email addresses and credit card numbers, they’re often a grocery store, pharmacy, clothing store and auto center all rolled into one. In other words, they know more about you than any business ever.
And that’s exactly what makes these retail media sites an incredible opportunity for marketers and brands.
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Globally, 240 million customers visit Walmart-owned properties every week, either in-store or online, and 150 million of those customers are in the U.S. 50% of all online shopping in America was done through Amazon in 2021. And thanks to the pandemic, 2021 was the first year that most American adults bought groceries online for the first time. The list of eye-popping stats about retail media goes on and on.
These retailers’ incredible cache of first-party data has allowed them to become premium suppliers of inventory and data in a relatively short period of time. And for brands and advertisers, this inventory is often addressable and targetable based on high-intent signals (like what your searches are and how many minutes you spend reading reviews), with strong fidelity to location (they know exactly where you live so they can deliver the goods). They know what you want, when you want it and what you want it with — plus they know exactly when you’re ready to buy. It’s a killer combination.
Unfortunately, there is a catch: For most advertisers, the proliferation of retail media channels also presents more complexity, more friction and way more challenges to getting started. If you think managing digital display ads, search ads, social ads and TV spots is challenging, now add in CTV, influencer marketing, in-game ads and retail media ads — all of which have their own proprietary ecosystem, their own metrics, their own optimization rules, their own ad specs and their own quirks.
In a nutshell: The media market is already fractured and it’s about to get even crazier.
The omnichannel reality, including the landscape of retail media, which currently includes search advertising, display, social, CTV and more, is unwieldy for all but the biggest advertisers. Operating across all these platforms is resource-intensive and, in many cases, it’s not even ROI-positive for marketers.
What’s more, virtually every retailer has a vested interest in building moats around their supply and first-party data. With more and more channels becoming less and less connected to one another, the burden falls on advertisers and their partners to stitch disparate pieces together. Even testing into a new platform can be a full-time job for several people. It’s daunting.
With cookies and mobile identifiers going away, retail media represents a huge and growing opportunity for brands and advertisers. Here’s how even a small to mid-size advertiser can get started on a path to success:
- Simplify your toolset. You don’t have to be an expert in TikTok, programmatic ads and retail media. That’s what technology is for. Workflow solutions can work with most major platforms to manage your creative, optimize it, analyze it and take the guesswork out of what works — and what doesn’t.
- Cover your bases. Research has shown that omnichannel campaigns deliver better advertising results than the combination of their individual parts. Strive to learn the media mix that drives the optimal results for your budget and goals.
- Don’t boil the ocean. Focus on one or two partners to start. Choose a retail media source that best matches your target audience — not the biggest one on the block. You’ll get better service, better rates and in most cases better targeting.
The reality is that advertisers, especially smaller advertisers, need options in a post-cookie, post-universal ID world that aren’t Google and Facebook. Retail media is truly a golden opportunity — especially for advertisers that get there early.
Tom Cheli is CEO of Frequence, a leading advertising sales automation and workflow software company. He has held a number of high-tech senior management roles in Silicon Valley over the past 20 years. Prior to Frequence Cheli was the COO at Tellapart and the EVP at QuinStreet, where he spent over 11 years and held various management positions driving growth for sales and operations. He has also previously held executive positions at Collagen Aesthetics, Akorn and Merck. Cheli earned his BA in Sports Medicine & Biology from the University of the Pacific.
