Retail media needs no hype - its value is obvious
By leveraging first-party data, retail media is gaining serious prominence in adland, says Amir Rasekh (managing director, Nectar360) - and with good reason.
You know a media trend is a serious one when industry experts compete to throw big growth predictions at it. As we see brands and agencies reorganize their business around their retail media aspirations and increase their investment notably, it is clear retail media is more than a fad and now an important part of the marketing mix.
In the UK, Goldman Sachs expects grocery retail media to attract £2bn next year. Just a little further down the line, IAB Europe suggests that retail media across Europe will overtake traditional linear TV spend by 2026, when it will be worth €25bn. GroupM, meanwhile, has pegged global retail media at $160bn by 2027, forecasting 60% growth over five years.
What can we take away from this? At the very least, that you’re unlikely to be wrong if you suggest that retail media is building towards big things.
It is obvious now that the wind has been blowing in this direction for quite some time. Retail media wasn’t always the first phrase on the lips of those who attempted to imagine a world after third-party cookies - but clearly, the fit is a good one.
Retail media leverages deep understanding of customer behavior based on permitted first-party data - for instance, retailers’ mature loyalty programs - to which third-party data can no longer aspire.
And meanwhile, retail media offers an increasingly robust solution to a problem digital advertising has never quite cracked in its own right, even at the peak of its cookie-driven powers: how to create a cohesive, measurable, closed-loop connection between brands and customers across a full range of consumer touchpoints - online and in-store.
Importantly, customer experience must always win out - it must be additive to the customer journey, which retail media is well placed to do.
And so we find ourselves here, as retail media very clearly makes a space for itself at the top table of media choices, but still with a little confusion in some quarters about its actual scope.
Perhaps because everyone knows something about supermarkets, the assumption about retail media was always that it probably had something to do with in-store activation. In-store is a major part of it, of course - at Nectar360, we are in the process of building a market-leading connected digital screen network in partnership with Clear Channel. But it is now very evident to most ambitious advertisers that sophisticated retail media networks offer a unique opportunity for brands to build campaigns that span onsite (retailer-owned e-commerce sites), offsite (wider web and social platforms) and connected TV - a full-funnel offering with the ability to close the measurement loop based on actual in-store and online sales.
No wonder, then, that research from IAB and Microsoft has found that 92% of advertisers are now partnering with retailers, of one kind or another, to reach customers.
Careful counting - not by me - suggests that there are now more than 600 retail media networks worldwide. Clearly, not all of those are destined to thrive. The winners will be those that succeed in connecting their capabilities in the interests of both customer experience and ease of use for direct advertisers and agencies.
Like all the best innovations, retail media is fundamentally driven by demand. Advertisers want solutions that allow them to reach highly engaged shoppers across different channels, and to do it in ways that are targeted and contextual, but privacy-friendly, brand-safe and future-proof. Customers, meanwhile, want a personalized, rewarding and brilliantly seamless shopping journey.
Our retail media recommendations are guided by deep customer understanding and crafted to match brand and category goals. We carefully pick from an array of channels (in-store, onsite, and offsite) based on performance benchmarking to connect with customers at various stages of their journey, and we customize creative content and incentives to match the interests of different customer audiences, creating a personalized experience as we go.
There remain challenges for retail media, of course. Standardization of metrics is a major goal for retail media, and as an industry, we are moving in the right direction, with many of us playing an active role in working groups convened by ISBA and the IAB to create common standards.
There is work still to be done. But in a world of hype, retail media is a rare burgeoning phenomenon that justifies the excitement, with an increasing number of satisfied advertisers able to point to retail media campaign performance that proves it.
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