The retail media business is booming, as retailers provide access to first-party audiences and empower advertisers to connect with shoppers. But retailers have the opportunity to do much more than provide premium inventory. They can also facilitate media buying across the funnel, owning a greater slice of the advertising supply chain instead of outsourcing media planning to intermediaries.
Consider the case of a major national supermarket chain. In the past, the retailer might have been limited to selling OOH and offline inventory. More recently, it may have started to monetize its online presence. Yet these efforts remain disconnected, with efforts for retail media, co-op advertising and offline being managed through different buying teams. The future of retail media networks is one of integrated advertising. Retailers can become the agency of record for their own properties, leveraging second-to-none inventory and audience intelligence to help advertisers maximize the value of their ad spend.
In short, retail media networks need to enable full-funnel buying. That means helping brands navigate inventory to maximize ROI; offering inventory for all parts of the funnel, not just the bottom or point of purchase; and helping advertisers with measurement to prove the value of spend and optimize it.
Be the Media Buying Expert for Your Own Inventory
Much of the retail media conversation has focused on retailers’ first-party data. No doubt that’s an advantage at a time when customer targeting is getting more difficult due to privacy changes. But providing inventory and customer data to fuel targeting is only the start of a retail media offering. Retailers can go the extra mile by becoming the media buying experts for their own inventory.
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Let’s say the aforementioned supermarket chain is working with P&G. The supermarket should position itself as the agency of record for its own media ecosystem. The supermarket should say to a brand advertiser like P&G, “Give us $25 million of your marketing budget and we will find the most effective places in our ecosystem for that money to reach and convert customers.”
This strategy is not just an opportunity for the retail media network to gain incremental revenue. It capitalizes on the institutional knowledge of the retailer’s core business to offer the advertiser the most effective possible agency service.
No agency will be better versed in the supermarket’s customers and media properties than the retailer itself. By leveraging this expertise, the supermarket can boost advertisers’ ROI, fostering a virtuous cycle of strong ad performance that fuels the prosperity of the media network, which in turn spurs more investment.
Facilitate Full-Funnel Ad Strategies
The basic advertising play at the core of retail media networks is well known: the retailer uses a customer’s transaction history to drive sponsored product ads on its own site for complementary products or for the same products the customer has previously bought. But sophisticated retail media networks are going beyond this basic use case to equip advertisers with full-funnel, multi-property media strategies.
For example, in addition to taking out sponsored products ads on the retailer’s site, the advertiser can capitalize on the retailer’s customer intelligence to target ads on other channels, such as CTV to shoppers via third-party platforms. Cooperative paid social ads can redirect shoppers in-market for an advertiser’s products to the retailer’s site, benefiting both brand and retailer while saving costs by eliminating duplicate spend. This is another way the retail media network can emerge as an agency-style service — not just providing inventory but holistically guiding the advertiser.
Retail media networks can also bring the worlds of online and offline commerce together by combining channels like display, search and CTV with digital out-of-home media. In addition to reaching shoppers on a retailer’s website, advertisers can capitalize on in-aisle inventory to reach customers at both the virtual and physical points of purchase. Advertisers can combine digital and physical spend to build awareness and then close the deal, and retailers can track patterns in the strategy’s effectiveness to advise advertisers on when it makes sense to go for the bottom-of-funnel ad.
Help Advertisers Measure and Optimize Spend
In addition to being best positioned to act as the agency that helps advertisers plan their retail media spending, retailers are ideally situated to help advertisers measure and optimize their investments. Retailers that are also top-notch media partners will supply unified dashboards that allow advertisers to visualize performance across retail media channels to continually recalibrate their mix.
Retail media is surging in the first place in large part due to privacy issues that make visibility into marketing performance difficult. By relying on the organization that has consensual first-party data from the shoppers an advertiser wants to reach for marketing insights, the advertiser leaps through measurement hoops and gets the granular intelligence it needs straight from the source. This is an accurate and regulation-proof way of approaching marketing measurement.
The rise of retail media networks is among the hottest digital advertising trends in years — the sector is expected to account for nearly 20% of overall digital ad spend by next year. But supplying exposure to shoppers near the point of purchase is only the tip of the iceberg. Savvy retailers will become the masters of their own media networks, cutting out unnecessary agency fees and guiding their advertisers to the best possible results.
Andreas Reiffen is Co-founder and CEO of Crealytics, a global leader in first-party data-activated performance advertising and retail media. Born in Berlin but based in Brooklyn, Reiffen helps solve global ecommerce challenges for Crealytics’ 60+ retail advertising clients, including Foot Locker, Revolve, ASOS, Lands’ End and Urban Outfitters. If he’s not calculating CLV and incrementality measurements, he’s geeking out on exotic coffees or practicing his one-armed handstand.
