The term “retail media” has been around in retail and media circles for several years. If you're looking for a deeper understanding of the meaning and application of retail media, or simply need a practical explanation of what retail media actually is, you've come to the right place. place.
This dedicated Retail TouchPoints resource site will be regularly updated with the latest news, statistics, trends and events in retail media. Read to find out:
What is retail media?
What is a retail media network?
Average retail vs. Commercial vehicles
Why is there such a rush to retail media?
Why is retail media growing so quickly?
Why are so many retailers creating retail media networks?
Largest Retail Media Networks
Leading Retail Media Providers
Types of Retail Media
Commerce represents the house and the street
New space: in-store retail
This page was last updated on January 29, 2024.
What is retail media?
Retail media is when a retailer offers advertising opportunities and services, similar to what media outlets such as publishers and television networks have been doing for years.
The types of media products a retailer can offer range from on-site advertising options such as ads and videos on its website, app, or in its physical stores (the simplest example is an ad for a product sponsored by Amazon). present) - commonly called "external advertising". Off-site advertising is when a retailer helps advertisers reach their customers through third-party channels such as social media or other websites they don't own ("retargeting" is a common example).
Outdoor advertising It is generally more complex than local and is therefore only offered at this stage by more mature retail media chains. More information on outdoor advertising in retail media can be found in this section.
In addition to advertising options, many of the more sophisticated media retailers also offer services to brands that advertise with them, which may include data analytics, self-service advertising platforms, advertising management assistance, campaigns and much more.
Breaking News: Instacart Launches Shopping Ads From Website Partnered With Google
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What is a retail media network?
The terms "retail media" and "retail media network" are often used interchangeably and mean essentially the same thing.
Retail media is a broader term used to describe the concept that retailers use systems, infrastructure, data, and access to shoppers to help advertisers reach consumers. Retail Media Network is the platform that retailers put on it. Examples of retail media networks include Amazon Advertising, Walmart Connect, Target's Roundel, Kroger Precision Marketing, and Best Buy's Retail Media+.
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Retail media and business media
Another term often used interchangeably with "retail media" is "commercial media." Although they are essentially the same thing, many industry experts believe that the term "media marketing" provides a more precise definition of what these new advertising platforms are capable of.
In particular, with the proliferation of offerings such as social commerce (where consumers can purchase goods directly on social networks) and in-game purchases (which consumers increasingly make within the gaming environment and the metaverse), some believe that the term "commerce" describes them. More precisely. Media Retail Opportunities. That is, in these and other cases, while the campaign may be based on the data and capabilities of the retailer, the actual connection with the consumer and even the transaction occurs in a non-traditional retail environment. So, “merchandising” is a broader term to describe this new set of advertising features. The term “commerce” is also broad enough to include media offerings from companies that target consumers other than traditional retailers.
Sucharita Kodali, an analyst at Forrester, is one of the proponents of the shift from "retail" to "commerce." She said on LinkedIn: "It's time to stop calling it 'retail media' and start calling it 'market media.' Kodaly's statement comes on the heels of news that Uber and Lyft (both non-retailers) are making a lot of money from their media efforts.
Although both terms are used today, "retail media" remains the dominant descriptor, much to the chagrin of some: "I don't like the term 'retail media networks'." Michael Shue, vice president of media strategy and retail. Kroger's media network products, Kroger Precision Marketing, spoke with Retail TouchPoints . “We appear to be something apart, when in reality we are just a media company within a retailer. I think there should be and will be a movement to view retailers as simply a media company and investment arm for brands.
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Why is there such a rush to retail media?
The explosion of retail media has been so seismic that Insider Intelligence called it "the third great wave of digital advertising" (search advertising and social media advertising were the first two) . And Mars recently said: “Retail media is now almost universally recognized as one of the most effective methods of business marketing. »
Retail media not only allows retailers to tap into untapped revenue from existing channels, but it has also reached a major inflection point in the world of marketing. Traditional TV audiences continue to decline as third-party ID marketers lead the way in effectively targeting their digital campaigns.
Meet Retail Media, an all-new advertising channel that leverages rich personalized consumer data from retailers, target audiences (i.e. shoppers), and a direct connection to the actual end-to-end transaction end.
According to GroupM, retail media revenue will reach $101 billion in 2022. This figure represents 18% and 11% of all global digital advertising, respectively. all announcements. In the United States alone, average retail spending is expected to reach $45 billion by 2023, according to Insider Intelligence .
And those numbers are set to rise: Group M predicts that retail media advertising will grow 60% by 2027, outpacing the expected growth of all digital advertising . Emarketer estimates that retail media networks will contribute $106 billion to advertising in the United States by 2027.
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Why is retail media growing so quickly?
Retail media networks have become a very popular business tool to help retailers generate additional revenue. But they only do this if advertisers agree to hand over their marketing investments to retailers, which the figures above clearly show.
Besides the costs and limitations of traditional digital marketing channels like social media and search, there is another important reason why advertisers are shifting their marketing spend to retail media: Unlike advertisers in other channels, retailers have a direct link with consumers.
“Deal optimization is critical,” said Quentin George, a McKinsey partner and leader of the firm’s business media practice. "What gives retail media networks an advantage over almost all major media owners is the availability of deals. Over the past 80 years, media has optimized impression distribution: reaching the audiences we We said we wanted to achieve The problem is that "all optimization is about marketing activities and not marketing results. What retail media wants to change is create a direct correlation between impressions and SKU sales [and that’s] very exciting and transformative.”
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Why are so many retailers creating retail media networks?
There are several reasons for the rush to create retail media networks. First, there's the Amazon effect: Marketers see how lucrative ad sales have become for this perennial disruptor (nearly $38 billion in 2022) and want a piece of it. And those who have followed Amazon's path have been successful in many cases. For example, Macy's RMN launched in 2020 and was able to generate $105 million in revenue the following year, 2021.
Each of the ten largest U.S. retailers now has a retail media network. Marketers can do without their own shakeup, especially as new players continue to generate incredible ad revenue. Walmart, which renamed its media group Walmart Connect in 2021, reported advertising revenue of $2.7 billion in 2022, not bad for a company whose core business is not advertising .
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Largest Retail Media Networks
Amazon is by far the leader in the retail media industry, accounting for more than three-quarters of the U.S. market. Amazon Advertising will be 12 times larger than its closest competitor, Walmart Connect, by 2023, according to Insider Intelligence .
But that doesn't mean advertisers aren't spending money elsewhere. While 77% of consumer goods brands partner with Amazon, 56% with Walmart Connect, 29% with eBay, and 27% with According to HomeDepot Merkle.
And even though Amazon has absorbed most of the money spent by retail media, there's still plenty of money to be made. Forrester estimates by quarter retailers already generate more than $100 million in revenue from their media networks, a figure that is likely to increase significantly as these companies continue to expand their offerings and work to close the gap with Amazon .
Today's major media networks include:
Other companies offering retail media include:
(Author's Note: This list is not exhaustive as new retail media networks are launched regularly)
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Leading Retail Media Providers
While some companies choose to build their retail media network themselves, there are now a wide variety of technology companies and consulting firms specializing in this growing sector.
Recently, an exciting new offering appeared: carrot ads on Instacart. The online retailer operates one of today's leading retail media networks and is now commercializing its technology to help retailers grow their retail media operations. Instacart is also adding advertising features to its Caper Carts, smart shopping containers that retailers can implement in their stores.
“We are extending Instacart's advertising technology, products, services and talent to our retail partners to leverage their owned and operated e-commerce sites,” explained Ryan Mayward, chief advertising officer of Instacart. 'Instacart, in an interview with Retail TouchPoints . “Building an advertising business is a significant investment that requires time, talent and technological know-how. When merchants use Carrot Ads, they can leverage Instacart's depth of ad technology and ad sales talent without outsourcing their teams.
Regarding the decision to build in-house or with a partner, Jordan Whitmer, who has led retail media strategy for several brands, including The Hershey Company and now J&J, offered this analogy: “The size of your property. find. Half an acre, if I have it, I'm probably not big enough to build a business around it. The best thing for me is to find someone who will come and make it and sell it. Now, if I have 3,000 acres of land like Walmart, and I find an oil well, it would probably make sense for me to start a whole company and own it all. »
According to Dustin Cochart, Director of Network Analytics for Dollar General's DG Media, finding the right partners at all levels is absolutely critical to success. For example, Dollar General works with Bridge to determine the identity of potential customers, LiveRamp to link those customer IDs to other platforms like The Trade Desk, and other solutions to "link those customer IDs to point-of-contact data." specific sales,” Cochart shared during the session. . RISO 2023 Conference.
“It is extremely important to be as prescriptive as possible with the data and to involve virtually all of the different stakeholders at all times so that we have multiple perspectives to evaluate how the data is going to be perceived, because the proposed "The fundamental value of a retail media network is the audience and its size," he told Cochart.
To that end, Uber recently partnered with Omnicom Media Group in a data collaboration partnership aimed at “delivering valuable insights to improve media plans, refine metrics, and optimize increments” for advertisers on its vast media network.
"With 130 million monthly active platforms worldwide, the strength of Uber's advertising proposition is that it provides real-time insight into where consumers are going next and delivers relevant messages that match the immediate intent,” he told Mark Graeter, vice president and general manager. . . In a note from the head of Uber's advertising department. “As we look to the future of mobile media and retail, this new partnership leverages OMG's extensive data and partnerships, enabling us to achieve new levels of precision in intelligent targeting, analytics and activation for advertisers.
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Types of Retail Media
There are three main types of retail media offers:
- On-site : Ads placed within a retailer's digital ecosystem, such as its website, app, and emails;
- Off-site : advertisements placed on third-party channels, such as social networks, other websites or connected TV platforms, based on the seller's customer data and reviews; AND
- In-store: Ads placed in the physical environment of a store, such as audio announcements played on displays or in-store speakers. Sampling programs can also support in-store retail operations.
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Local and external retail media
Although most retail media today is dominated by website-based offerings: sponsored search, display ads, sponsored ads, etc. across digital retail channels. The real power of retail media lies in combining retail data with other data. including third-party channels, stores and platforms such as social media and connected TV.
“We'll see a significant amount of money invested in offsite activation this year, with CTV and social commerce in particular seeing a big boom where you can buy that audience in that offsite environment while still maintaining loop metrics closed. " predicts Jeffrey Bustos, director of measurement, addressability and data at the Interactive Advertising Bureau (IAB), in an interview with Retail TouchPoints .
This is the true promise of retail media: using retailers’ first-party data to target online ads. Many retail media startups are already doing this effectively:
- Nordstrom said at NRF 2023 that offline now represents 60% of its advertising business;
- In late 2022, Lowe's announced an integration with Yahoo's Demand Side Platform (DSP) to enable remote brand advertising across its media network;
- In early 2023, Albertsons became the first retailer to take advantage of Pinterest's new integration with LiveRamp, which allows Albertsons to combine its data with that of the Pinterest platform in a clean, privacy-protected space to provide its advertisers Closed-loop reporting on Pinterest campaigns. . provide. ;
- Walmart has partnered with several platforms, including TikTok, Snap, Roku and Firework, to enable off-site video advertising; AND
- Kroger has partnered with Magnite to expand its CTV offering.
“We've done studies where we bought ads in the external programmatic space using our own data and a standard third-party data segment and found a 150% difference in business performance between the two,” a- he told Michael Shue of Kroger Precision Marketing at Retail. said. Points of contact . “People sometimes wonder because it's a little more expensive to invest in retail media, but we're showing that it pays for itself twice because it's much more relevant to the audience.”
Kroger Precision Marketing is one of the most advanced off-site advertising operators in the world, with its offering now including third-party media, programmatic products and relationships with major platforms and publishers, including Roku, Pinterest and Meredith. For example, the ability to interact with Kroger customers when they search for a recipe on Allrecipes can be particularly useful for brands.
Here's another example from J&J's Jordan Whitmer: "For example, the intersection of product and audience with Target and Pinterest makes a lot of sense because Target guests are remade in terms of social influence," a- he declared. “When we buy directly from Pinterest and then from Roundel [Target's retail media network] Pinterest, the target audience is so valuable and effective for us that I directly get the best ROI in Roundel Pinterest, despite the fact that it is, despite the fact that it is, although it is double to me.
This increased relevance and gated visibility has a big influence on where brands spend money and how they build their campaigns. “When you add all these external opportunities, it changes the way you increase brand recognition,” explained IAB's Jeffrey Bustos. “Before, to increase recognition, you had videos at the top of sales funnels or social campaigns, and then at the end you had to do a brand effectiveness study or an MTA [multi-test attribution] card. to understand what your sales are. Now, outside of retail media, whether it's CTV or within social media, you literally have the ability to manage major media and immediately understand how consumers are responding and interact with your brand.”
CTV, in particular, is making a lot of noise in advertising circles, both as a separate channel and because of its potential for integration with retail media networks. Some call this convergence the “next line” of digital advertising.
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New space: in-store retail
With all the focus on digital technology, advanced retail media networks are turning to another area to expand their offerings: physical stores. “Marketers want to run advertising and marketing campaigns across channels, from TV and campaigns to increase brand recognition, to the end of the purchase journey, it’s "that is, in-store - so to speak, the last mile of advertising," said Andrew Lipsman.internal intelligence …
It's worth noting that average retail spending in the United States, according to Insider , will reach $45 billion in 2023 online alone. Lipsman therefore believes that physical stores will become the next big media channel, especially since 70% to 85% of sales still take place. . Shops by categories.
“There's only one Amazon, no one else has online access to Amazon,” said Lindell Bennett, former head of Amazon's advertising division and now the company's chief revenue officer. of Cooler Screens media. “But Amazon doesn’t have the same physical presence as Walmart, Kroger or Costco. More people are coming to their [these retailers] physical stores than to their online channels, so all these other [business media] players as well as Amazon are going to have to go to the store at some point. "
As stores begin to move to digital technology, the places where retail media can be offered are expanding, although Lipsman cautions that “there is a CX problem. Any retailer will need to be very careful not to overcharge consumers. » Surfaces that can become advertising platforms in the store include front of house signs, TV walls, end caps, drop-down screens between aisles, smart shelters and smart displays for shopping carts .
Enabling in-store media can also provide retailers (and brands) with valuable footfall and purchase data. For example, the four-year-old company Cooler Screens has moved stores to cooler aisles with digital screens that replace glass in cooler doors. Current customers include Kroger and Circle K.
“What struck me about Cooler Screens was the ability to open the marketing funnel just a few feet from the store,” Bennett said. “It’s not just a digital signal, it adapts to the user in just a few meters. So, we will offer you the type of advertisement with a length of 6 to 12 meters. Then, when that person takes a step forward a meter or less, we'll show them an ad of a different type. And then, if they pause for six seconds, we'll remind them at the last second about ad retargeting.
"Everything is protected by confidentiality, so we don't know who this person is, but we get data on how many people are at a certain distance, then how many people go another distance, how many people open the door, how much people buy at points of sale", - continues Bennett. "Even with a fresher section from the start, it gives a lot more data to show metrics and increase support efficiency. If you do this for the entire store, we won't draw parallels with what l 'can be done in an e-commerce. Media and indicators Throughout the store is the next level. "
Another recent example is the HY-VEE partnership with Samsung, which allows the supermarket chain to deliver advertising and dynamic content in stores, as well as Samsung connected TV and a reliable network of direct out-of-home advertising channels (OOH). by
All of this, of course, requires significant investment in the retailer's infrastructure, which, as Bennett notes, could become a game-changer in the increasingly crowded retail media landscape, as most retailers lack the capital to do so. . “There is a scale of understanding how this can be achieved,” Lipsman explained. “Some early-stage startups often face marketing tradeoffs, when a startup may have to cover investment costs in exchange for advertising revenue.”
For Lipsman, in-store retail media, while an important part of a broader spectrum, is an entirely different animal from online retail media. “Think of the in-store media channel as a replacement for TV ad spend,” he said. "What is most important in television? High-quality, branded programming is made at scale in a secure environment. But this scale is becoming increasingly difficult to achieve on television, especially among of an audience aged 18 to 40., which is what TV advertisers are aiming for. In most cases, in most cases. You won't be able to reach more using linear TV, but the channels are sold in stores, so you can access that and brand recognition and value at scale.
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