In 2023, the retail media market is booming. Indeed, global valuations predict that the market will be worth more than linear TV than the end of 2025. With such lofty growth forecast, brands in the industry may be asking, ‘why the hype?’ Having worked in retail media for more than a decade I’ve outlined below just some of the reasons why brands find the retail media opportunity so valuable.
Targeted advertising: In truth, with Google degrading third party cookies next year a lot of the excitement for retail media and associated revenue projections are based on the heightened value of retailer’s first party data at this time. Commercially astute retailers are seeking to plug the gap brands now face re. powering targeted digital advertising with their own customer data. Today, brands that leverage retailer’s first party data can continue to create personalised and relevant advertising campaigns both within and external to that retailer’s estate. In fact, digital targeting has never been so powerful as purchase data is a new overlay to already established digital targeting norms such as demographic and location targeting.
Linked to the point of purchase: However, retail media isn’t a new discipline. Yes, brands have been leaning on media assets within physical stores or e-commerce environments to ensure visibility at the final point of purchase. Brands who connect retail media with their wider ‘brand’ marketing investment will ensure they win with increased category engagement. This is particularly important for CPG brands where loyalty is extremely low.
Enhanced commercial relationships: A value point not talked too much in today’s environment but perhaps the most important is that retail media investment can support wider commercial agreements with key retail partners. Retail media is unlike any other marketing opportunity, as retailers aren’t ‘just publishers’ – brands and retailers interact commercially across complex terms of which retail media is just one. Getting retail media right with key partners can support the development of stronger holistic trading relationships.
Measurable results: Being linked to the point of purchase retail media provides brands the opportunity to track the success of their advertising campaigns in real-time. By monitoring key performance indicators such as click-through rates, conversions, and sales, CPG brands can optimise their advertising strategies and achieve a higher return on investment (ROI).
Increased visibility: Retail media can help brands increase their visibility and awareness among consumers. By partnering with retailers to serve targeted ads, CPG brands can leverage the reach and influence of those retailers to expand their customer base and reach new audiences.
Enhanced customer experience: By partnering with retailers to provide personalised and relevant advertising, brands can enhance the customer experience. Targeted ads can help customers discover new products, learn about promotions, and stay informed about relevant news and trends. This can increase customer satisfaction and loyalty, as well as drive repeat purchases.
Competitive advantage: Retail media can provide brands with a competitive advantage in the crowded marketplace. By leveraging targeted advertising and data-driven insights, brands can differentiate themselves from their competitors and reach consumers more effectively. This can help increase market share and revenue.
Cost-effective: Retail media can be a cost-effective advertising option for brands. By leveraging the data and insights provided by retailers, CPG brands can create more targeted and effective advertising campaigns, which can lead to a higher ROI.
In summary, retail media represents a valuable opportunity for brands. This opportunity is not limited to the facilitation of targeted digital activation. Brands who win with retail media can nurture important commercial relationships, increase the effectiveness of total marketing monies, and learn and optimise over time.
Want to learn more? Get in touch.