Ben Kneen, senior director of product management, Xandr
It’s a challenging time for retailers in the advertising industry. As they cope with supply chain woes and inflation-related pressures, they seek high-margin revenue streams amid evolving privacy regulations and massive shifts in identity solutions — including IDFA, the deprecation of third-party cookies and more.
In light of these challenges, retailers increasingly partner with brand marketers to unlock revenue streams through retail media businesses. They’re also capitalizing on access to first-party consumer data within the approach. Retailers are often sitting on troves of first-party consumer data — essential to revenue and closed-loop attribution and not available on the open exchange. Retail sales data is expected to triple this year as 74% of brands plan to dedicate budgets to retail media networks. Forrester predicts retail media will grow to a $50 billion market in 2022, with no signs of deceleration.
Industry behemoths such as Amazon and Walmart have already bought into the retail media strategy and are running full speed ahead. For smaller players, thanks to several technology partners focused on the retail space and the maturing technologies of curated marketplaces, it is also possible to stand up sophisticated capabilities with little to no tech expertise.
Retail media is a powerful differentiator full of data experts
Retail media networks aren’t a new concept — they’ve been around for decades in an offline format through end caps in the grocery store and coupon booklets at the checkout counter. For marketers, this media channel is a powerful differentiator in that the data is typically directly aligned with their core goals. With this, marketers no longer have to target females with children in a household in hopes of selling breakfast cereal — they can target breakfast cereal purchasers. Furthermore, virtually all retail media businesses have access to direct, point-of-sale data to measure the return on ad spend.
At their core, retail media businesses are data experts. They have to be to run their business, order inventory, price millions of SKUs and operate complex discount and incentive programs. Retail media channels offer a premium data layer, one that is compiled and customized by experts.
And yet, while retail media moved to digital years ago, it typically remains limited to the retailer’s owned and operated properties — whether an in-store aisle or a digital experience. Not only that, but most of these networks are also not real-time and continue to strictly sell through insertion orders, even as marketers have heavily reallocated budgets to programmatic channels. Because of those gaps, retailers are leaving money on the table.
Retail media platforms built on curation offer more control
Retail media platforms empower retailers to stand up a modern retail media business without the need to build their own tech stack. Curation allows them to package valuable first-party data and premium media into a single curated deal sold to brands programmatically across all major media buying platforms.
Importantly, the mechanism for this is a media product, not a data product, which allows the retailer to control their data assets, price them in custom ways, issue them only to trusted partners, and then control the media with which they package it.
The two key enhancements to the existing retail media network concept, offsite reach and programmatic access, also boost retail media networks’ value proposition for buyers. Brands can leverage retailers’ consumer insights to run effective advertising campaigns and even inform product development. Plus, the retail media model enables targeted transactions and closed-loop attribution without third-party cookies.
First-party data will continue to reign
For years, retail media was a niche business on the sidelines of digital media, edged out by tech-savvy data aggregators and the glow of the open exchange scale. More to the point, it was almost entirely bottom-funnel in nature.
In 2022, however, marketers and retailers are approaching retail media as a powerful differentiator, rich with valuable point-of-sale data and data experts. As it becomes clear that the future of marketing will rely upon first-party data, retail media platforms built on curation offer control while also providing brand marketers with the data they need.
Similarly, retailers recognize a significant opportunity to build their capabilities for the new normal, where first-party data reigns. If the transition represents a disruptive period, a throughline remains — marketers’ demand for reach and scale. Curation technology is the answer — easy to use, highly scaled and programmatic ready.
Sponsored By: Xandr
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