It’s hard to find a topic that all marketers agree on, but if there is one, it’s likely that programmatic ad buying continues to be a dominant channel for advertisers looking to scale. In fact, it will make up the vast majority — over 91% — of the current U.S. digital advertising spend in 2024, according to eMarketer. With programmatic spend increasing and the platforms themselves launching more advanced services for advertisers of all sizes, there has never been a better opportunity for smaller retail media networks (RMNs) to compete with their larger (and until now) dominant cousins.
Traditionally, the RMN space has been dominated by major players with extensive internal resources and the budget to coalesce the massive amount of first-party data required to create the precise audience insights, segments and targeting capabilities that make advertising on an RMN appealing to small- and medium-sized brands. However, as technologies and resources have become more widely available, smaller RMNs are now a viable option for brands looking to leverage the benefits of personalized, data-rich campaigns.
Traditional Barriers for Small Retail Media Networks
Historically, smaller RMNs weren’t able to compete with larger networks because success in this field depended on access to expensive resources that either weren’t available or weren’t feasible. Larger RMNs can afford to invest in the specialized talent, hardware and resources needed to stay competitive in a marketplace dominated by industry giants. Meanwhile, smaller networks have struggled to compete with the millions of dollars being invested into technology and product enhancements over the last decade, as major retailers have shifted their focus to the huge opportunity of generating advertising revenue alongside traditional retail revenues.
A key driving force for the larger networks has been the rise of advanced data analytics, which now power the highly targeted advertising campaigns brands expect. Need to target dog owners with an interest in home renovation? Larger networks have the tools to make it happen. Larger networks also can afford to hire highly skilled data scientists to develop these models and programs, leveraging their size to develop accurate predictive models and detailed user profiles — capabilities that were previously out of reach for smaller networks.
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Smaller RMNs could largely only compete on the value proposition of being in a niche but in demand category to win advertiser dollars. However, now these networks have a powerful ally and tool that can help them level the playing field.
The Power of Programmatic Platforms
As programmatic spend has skyrocketed, so has the ability for smaller RMNs to leverage programmatic platforms to offer some of the same “scale” capabilities that were previously out of their reach.
As it has across the ad-tech industry, programmatic product enhancements led by automation have reduced operational costs and increased the efficiencies associated with precision targeting for all networks. For the smaller networks, this translates to a decrease in the investment required to build their own predictive models and targeting capabilities.
Even small networks can run campaigns at scale without investing in a large internal ad ops team by tapping into ad exchanges and supply-side platforms. These resources open up more advertising opportunities, and smaller networks don’t have to negotiate terms for each avenue individually. Whereas seamless omnichannel advertising was once limited to resource-intensive large networks, it’s now in the hands of networks of all sizes.
Beyond access to scale, programmatic platforms also provide access to premium inventory. Smaller retail networks, often restricted to lower-quality inventory, face a tougher challenge in achieving strong ad campaign performance because they struggle to be at parity or beyond with the premium inventory that larger retail media networks can provide.
As programmatic platforms have continued to evolve, they have continued to reduce the barriers for smaller advertisers by introducing dynamic pricing models and eliminating minimum spend requirements. This opens up more opportunities for smaller RMNs to gain access to premium ad inventory without requiring a cost-prohibitive upfront investment. The result is that now smaller RMNs can easily access a wide range of premium ad inventory, both local and global.
Additionally, better data utilization means smaller networks can combine the first-party data they have with the advanced data and algorithms provided by programmatic platforms to create highly personalized and relevant campaigns for their advertisers. Smaller RMNs also are often in a better position to measure customer website interactions and other data points to enhance targeting and improve results, adding even more value to their buyers.
Enabling Smaller RMNs to Scale
Smaller networks now have access to data and the benefits that come from scalability, enabling them to use real-time data to deliver relevant content based on consumer behavior and drive highly effective campaigns for their advertisers. This agility improves campaign effectiveness and allows them to adjust strategies quickly in response to market changes.
Several smaller RMNs are taking advantage of these enhancements to offer services comparable in quality to those offered by larger networks while maintaining their personalized attention as a differentiator. In addition to the benefits provided by programmatic platforms, smaller RMNs can highlight the unique value they bring that larger networks can’t offer. Their personalized service and attention to detail can set them apart, particularly for smaller advertisers and brands that need more bespoke campaigns and support.
Mark Zamuner currently serves as President of Juice Media, a data-driven omnichannel media activation platform he founded in 2020 that was acquired by Altice USA in 2022. Juice Media combines growth strategy, omnichannel media buying and analytics services with proprietary ad tech focused on audience identification, targeting, and attribution and optimization. Zamuner started his career leading marquee brand accounts at Ocean Media before joining the eHarmony marketing leadership team. In 2011, Zamuner founded TWO NIL, an independent growth consultancy designed to fill the gap between strategic consulting and effective execution of media investments. TWO NIL’s unique and award-winning approach had an outsized impact for clients, including unicorn companies Blue Apron, Wix, Zillow, Groupon, Dollar Shave Club and 23andMe.
