Retail media networks have been a point of interest in the digital advertising industry for several years, but lately, it’s become a much hotter topic. Retailers are creating advertising platforms that allow brands to advertise their products directly on their websites, mobile apps, and in-store displays. With the rise of e-commerce, retail media networks are being seen as the future of retail advertising. But is the hype surrounding retail media networks justified? Is it really the future of digital advertising or is it just another martech trend that will slowly fade? Let’s take a look at the reality of retail media networks and separate the hype from the truth.
The Hype Surrounding Retail Media Networks
Retail media networks are being hyped as the solution to all of the problems faced by brands in traditional digital advertising. Retail media networks are being marketed as a way for brands to reach a highly targeted audience at the point of sale, resulting in higher conversions and a lower cost per acquisition. Brands are being told that they can achieve higher ROI with retail media networks than with traditional digital advertising.
Reality of Retail Media Networks
While retail media networks have the potential to offer many benefits, they also have limitations that are often ignored in the hype. Retail media networks are still a relatively new concept, and there is limited data available on their effectiveness. The results achieved by brands using retail media networks can vary greatly depending on the retailer, the level of data and targeting provided, and the advertising format used. Retail media networks also face the challenge of being perceived as intrusive by consumers, who may view them as irrelevant or annoying.
A report by the Association of National Advertisers reveals that the use of retail media networks (RMNs) by brands is on the rise due to pressure from retailers. 88% of the surveyed companies indicated that they feel compelled to purchase advertising on RMNs as a result of the influence exerted by retailers.
Retail Media Networks VS. Traditional Digital Advertising
To determine whether retail media networks are the future of retail advertising, it’s important to compare them to traditional digital advertising.
Pros of Retail Media Networks:
- Targeted advertising: Retail media networks allow brands to reach customers at the point of sale, targeting those who are actively shopping for products and services.
- Data-driven insights: Retailers have access to a wealth of customer data, which can inform the advertising strategies of brands and help them better understand their target audience.
- E-commerce integration: Retail media networks leverage the existing e-commerce infrastructure of retailers, providing a seamless and integrated shopping experience for customers.
- Increased revenue: Retail media networks can generate additional revenue for retailers, while providing brands with a cost-effective way to reach their target audience.
Cons of Retail Media Networks:
- Limited reach: Retail media networks may not reach as wide of an audience as traditional digital advertising, which can cover a broader range of websites, social media platforms, and other digital channels.
- Dependence on retailer: Brands must rely on the customer base and data of the retailer, which may limit their control over the advertising experience.
Pros of Traditional Digital Advertising:
- Wider reach: Traditional digital advertising can cover a wider range of websites, social media platforms, and other digital channels, reaching a larger audience than retail media networks.
- More control: Brands have more control over their advertising experience, with the ability to select their own platforms and target audience.
Cons of Traditional Digital Advertising:
- Less targeted: Traditional digital advertising may not be as targeted as retail media networks, reaching a broader audience that may not be actively shopping for products and services.
- Limited data: Brands may not have access to the same level of customer data and insights as they would with retail media networks, making it more difficult to understand their target audience and inform their advertising strategies.
The Future of Retail Media Networks
While the hype surrounding retail media networks may not be fully justified, they are still a promising concept. Retail media networks have the potential to change the way that brands reach customers, and they are likely to play a significant role in the future of retail advertising. Retail media networks are likely to continue to evolve, with retailers improving their data and targeting capabilities and offering new advertising formats.
Examples of Retail Media Networks
- Amazon Advertising: Amazon Advertising is a digital advertising platform provided by Amazon.com. It allows advertisers to display ads to Amazon customers on various Amazon properties, such as its websites and mobile apps, as well as other websites not owned by Amazon. Advertisers can target customers based on various factors, including search keywords, products and categories, and customer behavior, among others. The platform offers various advertising formats, such as sponsored products, sponsored brands, and display ads, among others.
- Walmart Connect: Walmart Connect is a retail media network offered by Walmart. It allows advertisers to place their ads on Walmart’s digital properties and reach the retailer’s massive customer base. Walmart Connect provides a platform for brands to engage with shoppers in an effective and targeted way, using data and insights to inform ad placements and maximize the reach and impact of their advertising campaigns.
- Target Roundel: Target Roundel is a retail media network offered by Target Corporation, a leading retail company in the United States. It is a platform for advertisers to reach Target’s customers through various advertising channels including in-store, online, and through Target’s various mobile applications. Target Roundel provides advertisers with the ability to reach customers at various touchpoints in their shopping journey.
- Kroger Precision Marketing: Kroger Precision Marketing is a retail media network offered by Kroger, a leading grocery retail chain in the United States. It provides a platform for advertisers to reach customers through targeted advertising campaigns that are integrated with Kroger’s online and in-store shopping experiences. The network leverages Kroger’s data insights and customer engagement capabilities to deliver personalized and relevant advertising to shoppers. Advertisers can use Kroger Precision Marketing to drive brand awareness, engagement, and sales through a variety of digital channels, including email, display, social media, and in-store media.
Conclusion
Retail media networks have the potential to revolutionize the retail advertising industry, but the hype surrounding them may not be fully justified. Retail media networks offer brands the ability to reach a highly targeted audience at the point of sale, but they also have limitations, and the results achieved can vary greatly. Retail media networks are still a relatively new concept, and more data is needed to determine their effectiveness. Brands should carefully consider the benefits and limitations of retail media networks and weigh them against their marketing goals. The future of retail media networks is likely to be exciting, and it will be interesting to see how they evolve over the coming years.
Samaher is a MarTech professional with a strong background in marketing data analytics, marketing automation, email marketing, and paid ads. She has successfully helped companies such as Advyteam, Acredius, and Keyrus achieve their marketing goals through her analytical approach and strategic thinking.
