3 Takeaways from eMarketer’s Retail Media Essentials

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  1. It’s Growing Fast
  2. RMNs are a Mixed Bag
  3. The Gaps

eMarketer and Attain took an in-depth look at the conditions that make retail media such a strong alternative to other high-growth channels and the gaps that still need to be addressed to realize its full potential for marketers, retailers, and customers.

In short, retail media’s rise to power was ushered in by a failing and largely defunct system of 3rd party cookies, the explosion of eCommerce, and a need for targeted performance-based advertising solutions.

The pandemic forever shifted the landscape of commerce worldwide for a variety of industries, and in its wake, retail media arose in lockstep with eCommerce.

In case you missed the webinar, below are our 3 takeaways. Keep reading to learn about each one, including solutions for making the most of this booming channel.

It’s Growing Fast

Retail media will be the second fastest growing ad format behind connected television (CTV) this year, surpass it by next year, and leave linear TV in its wake in the US market by 2025, according to Paul Verna, Principal Analyst at Insider Intelligence.

Not only is retail media growing, it’s outpacing the total digital advertising market’s growth, nearly mimicking the eCommerce market’s growth.

Why the unprecedented growth? Retail media solves a number of problems marketers have struggled with leading up to its current success, including, access to first-party data that can work in conjunction with their internal audience data, point of purchase (and lead-up) data, and purchase/post-purchase clarity.

Retail media networks build their businesses on unique access to first-party data that has near-unfettered insight into customer purchase behaviors; something that is immensely valuable to brands who want to tie their ad dollars to sales and are actively working to futureproof their data strategy in a cookieless world.

RMNs Are A Mixed Bag

From discount stores and mass merchandisers to grocers and eCommerce giants, there are a number of major players that span the landscape of retail media, each adding its own value in process and depth of consumer insights.

In fact, it seems that almost every major retailer has an RMN or is part of one. This poses a slew of challenges for marketers, like:

Fragmentation

The sheer number of RMNs leads to each having its own platform, targeting options, and audience demographics. This makes it difficult to streamline advertising campaigns and optimize them effectively across multiple networks due to something as simple as differing ad creative specifications, driving teams to create multiple iterations of the same creative to fit each platform.

Resource Allocation

Time, budget, and personnel are all finite resources for brands, and choosing which RMN to dedicate them to can be a tricky business. Choosing which to dedicate these resources to itself requires a careful and often time-consuming strategy to ensure advertisers get the most out of their ad spend.

Learning Curves

It takes time for advertisers executing campaigns to learn the ins and outs of each platform as each RMN has its own set of rules, interfaces, and optimization techniques. The lack of interoperability is a functional issue for advertisers because it can be difficult to adapt from one system to the next, often in a single campaign if (more than likely) a team uses more than one RMN.

The Gaps

These issues and more lead to some significant gaps in the effectiveness of RMNs as a whole like the lack of standardization in measurement making it difficult to determine the success of a campaign across multiple networks. As such, many have likened RMNs to walled gardens.

“If you look at the analogy of a retailer and a retail media network, it is very much the four walls in which they operate,” said Brian Mandelbaum, CEO and co-founder of Attain. “This begs the question: where is the interoperability between one retailer and the next?”

Today, within these walled gardens there’s no true incentive for retail media to become interoperable and close the gap between metrics and attribution because they are already successful with proprietary siloed data offerings. RMNs provide home-baked performance metrics and don’t typically measure incrementality that takes into account all ecosystem-wide media buys. As a result, brands don’t really know how their campaigns measure up to their other non-RMN strategies.

To solve for this, Mandelbaum encourages advertisers to consider where their consumer is shopping.

“If advertisers consider where their consumers are, and where they’re making purchases, it will naturally inform their retail media strategy,” said Mandelbaum. “They may even want to complement the data that’s being produced by the retailers with other channels or partners to see the full picture and performance of their campaigns—which puts the focus back on attribution.”

The bug is a feature

With 92% of marketers reportedly using more than one retail media network, the concept of merging campaign metrics becomes increasingly muddled the more it is spread out across networks. However, asking for networks to consolidate their data is a pipe dream since their ownership of the data is what gives it its value.

This drives advertisers to one of a few outcomes:

  1. Interpret outcome data from each source individually and try to piece together an actionable conclusion.
  2. Cobble together the disparate outcome data to try to form an actionable conclusion.
  3. Work with a third party to analyze and contextualize the outcome data to produce a clearer picture and provide actionable insights.

Bonus: Working with a partner with their own pathway to permissioned consumer purchase data can help further corroborate disjointed data.

Retail media has become extremely powerful very fast. And with that rapid growth has become a mainstay for brands looking to maximize ad spend on a high-performance channel, but the gains are often obscured by the many layers of opaqueness. To truly understand and build a successful retail media strategy brands need to put the onus on themselves to see the bigger picture and demand more transparency, standardization, and clarity from retailers.

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