Traditional advertising models are no longer meeting the needs of modern marketers. Audiences expect customized messages and advertising channels such as television, radio, and print are unable to deliver personalized marketing messages to highly segmented groups. Even digital marketing has become more challenging with third-party cookies being phased out. The rise of retail media networks has disrupted the advertising landscape, providing a new and innovative way for marketers to reach their target audiences.
By delivering precise, targeted advertising at scale, retail media networks offer numerous benefits to marketers looking to break through in the crowded digital space. As retail media networks become more popular, marketers need to improve their understanding of the system and how it can help them.
In this article, we will discuss the rise of retail media networks, explore their impact on existing advertising models, examine the benefits they offer to marketers, and provide best practices for success when working with retail media networks.
The Rise of Retail Media Networks: a New Era in Advertising
Before we get into the impact of retail media networks, let’s be sure to understand what they are. Retail media networks are advertising channels owned by retailers, which they can use to advertise their own products or offer to third-party businesses.
While retail businesses currently spend less than 10% of their marketing budgets on retail media, this number is expected to grow 5X by 2024. Retail media networks are expected to become as common and mainstream as social media advertising.
Retail media networks can help businesses deliver a level of personalization that third-party platforms could not. Especially in a privacy-conscious advertising space, retail media networks empower retailers with greater insight into their customers’ preferences without being unnecessarily intrusive.
Benefits of Working with Retail Media Networks
Retail media networks can deliver marketers significant benefits, from granular reporting to improved customer targeting. Here are the top five reasons why modern marketers should use retail media networks:
Targeted Advertising at Scale
By leveraging consumer data collected by retail platforms, retailers can offer precise targeting of advertising to specific audiences, improving the likelihood of engagement and conversion. In a recent survey, marketers shared that a key reason they use retail media networks is their ability to deliver access to difficult-to-reach customers at scale without compromising on personalization.
Retail media platforms provide an entirely new revenue stream for retail companies, enabling them to monetize their customer data by offering targeted advertising to marketers. There are multiple ways businesses can use this data to increase revenue. They can use the customer data themselves to encourage more purchases or they can offer targeted advertising to other companies that might be interested in reaching the same types of customers—or they can choose a combination of both.
Enhanced Customer Experience
Customer experiences are often used by retailers as a differentiating factor that helps them rise above the competition. Through personalized and relevant advertising, retailers can improve the shopping experience of their customers by presenting them with products that align directly with their interests and needs. This can be done at scale with first-party data and an advertising channel that is completely controlled by the retailer itself.
Pro tip: Deploy a composable CDP architecture. This architecture allows for unparalleled flexibility in collecting various data types, both in batch and real-time. Composable CDPs integrate the data and centrally manages it, making it readily available for downstream applications like Retail Media Networks.
Improved Performance Metrics
Retail media networks offer advertising solutions with tracking and measurement capabilities, enabling advertisers to monitor and optimize performance to increase return on investment. Since the retailer owns the advertising platform, they have unfettered access to extremely granular customer data. This allows them to build highly comprehensive profiles for each customer and adjust outreach to them to guarantee the best results possible.
Pro tip: Utilize a closed-loop measurement approach. Closed-loop measurement is a technique used to gauge the effect of advertisements on consumer buying behavior, encompassing both online and offline activities. By employing this approach, you can monitor the performance of your advertising media campaigns throughout the entire purchase process. Assess the success of an advertisement in leading to a sale, and understand how your investment in media correlates with actual customer purchases.
This method provides insights into the channels, creative content, and publishers that are most influential in boosting sales. Additionally, it aids in fine-tuning your media strategy to guarantee the maximum return on your investment in media.
Here's an illustration of closed-loop measurement at work:
Traditional advertising channels have become less popular and effective with the introduction of social media and retailers have had to adjust their marketing strategies to reflect this. However, it is not enough for marketers to simply focus on digital marketing while ignoring other avenues available to them. By utilizing retail media networks, advertisers can build assets and avoid the high costs of traditional advertising channels such as TV, print, and radio, and instead benefit from more affordable and targeted advertising solutions.
How to Make Retail Media Networks Work for You
Once marketers have decided that they want to make use of retail media networks to reach their most important customers, they need to understand how that can be done effectively. Here are some tips that marketers should consider when using retail media networks in their campaigns:
Use Specific Ads for Each Target Audience
Retail media networks allow marketers to fine-tune their targeting efforts without being invasive. However, using the same advertising to reach out to disparate audiences can significantly hamper its effectiveness. Each customer segment has unique needs and preferences when it comes to how businesses communicate with them. Customers that prefer in-store advertising can be delivered advertisements designed just for them while customers on different social media platforms also have their own specially designed advertising.
Pro tip: Take advantage of location analytics. In-store retail media's challenge is accurately gauging promotional impact and ROAS, especially for non-endemic products. Brands want more than impressions; they seek tangible improvements in conversions and sales to justify advertising spend. Location analytics can enhance this assessment. For example, if a gym advertises at a health food chain, offering QR code discounts can track leads, while foot traffic data provides a broader evaluation. This data can analyze cross-shopping habits, track targeted demographic visits, identify specific campaign locations' most successful areas, and study visitation patterns and consumer profiles during the campaign, offering a comprehensive understanding of the promotion's success.
Build a Strong Data Foundation for a World without Third-party Cookies
Businesses need to transition from using third-party to first-party cookies but not every business has a system set up to enable that. Retail media networks can help plug this gap. These systems allow businesses to collect and organize first-party customer data. Retail media empowers retailers to learn more about their customers’ preferences and adjust in-store and online experiences accordingly.
Enable Omnichannel Access to Shoppers Who are Ready to Make a Purchase
Businesses typically have larger audiences in store than on digital platforms and marketers have been able to capitalize on shoppers who are ready to make purchases in-store. However, this ability hasn’t been as effective online. Retail media networks allow marketers to plan an omnichannel strategy and encourage more conversions across online and offline channels.
Drive Customer Engagement Early in the Decision-making Process
Customers tend to research the products they want to buy before making the purchase. Marketers may ignore the role that their own retail site plays in engaging with the customer early. By leveraging the vast reach and targeting capabilities of these networks, businesses can place their products and advertisements directly in front of potential customers when they’re in the early stages of exploring and researching products.
This early and strategic engagement has several benefits for businesses:
- Build brand awareness
- Establish credibility
- Capture the attention of customers who are actively seeking information and solutions
- Effectively influence consumer purchase decisions
- Foster brand loyalty
- Create meaningful connections with customers from the very beginning of their buying journey.
Deliver a Consistent Experience Across Social Media Platforms and Retail Sites
In a bid to stretch marketing dollars, marketers can easily make the mistake of focusing on specific platforms while ignoring others completely. A combination of utilizing retail media networks and optimized social media marketing is the key to reaching the largest audience possible while still being targeted. These networks leverage advanced targeting and data capabilities to ensure that advertisements and brand messaging are consistently presented to consumers across various online channels.
By integrating with multiple platforms and sites, retail media networks enable businesses to synchronize their campaigns, creative assets, and messaging to create a cohesive brand experience. This consistency not only strengthens brand recognition but also helps to build trust with customers as they encounter familiar and consistent messaging wherever they engage with the brand. By delivering a seamless and unified experience, retail media networks empower businesses to reinforce their brand identity and effectively communicate their value proposition to potential customers, regardless of the platform or site they encounter.
Bridge the Gap Between Sales and Marketing
Marketers can be preoccupied with metrics such as views and impressions but this does not always translate into more sales for the business. Retail media networks can help provide the sales data that marketing teams need to adjust their strategies as necessary.
Why MarinOne is the Best Solution for Marketers in this new Advertising Environment
With MarinOne, marketers gain a holistic view of their campaigns across different retail media networks, allowing for better coordination, data analysis, and decision making. It simplifies the complex task of managing and optimizing advertising budgets, bids, and creative assets across multiple platforms and networks.
Additionally, MarinOne offers comprehensive reporting and analytics capabilities, giving marketers deep insights into the performance of their retail media campaigns. They can access unified dashboards, track key performance indicators, and measure the effectiveness of their advertising efforts across retail media networks.
Overall, MarinOne empowers marketers to evolve and thrive in a marketing environment where retail media networks are commonplace. It streamlines campaign management, enhances optimization capabilities, and provides powerful insights, enabling marketers to achieve better results and drive growth in this evolving landscape.
To get started today, schedule a demo with one of our MarinOne experts.