Leveraging your commerce media network in economic turmoil
A combination of higher energy prices, wage bills, raw material prices, and reduced consumer spending has put a dent in the profit margins of UK businesses
While there is little that businesses can do to tackle inflation or the reduction in consumer spending, there are still plenty of opportunities for them to diversify their revenue streams. The biggest one of these opportunities lies in commerce media.
A decade ago, Amazon launched its retail media network in an attempt to claim a piece of the advertising revenue pie dominated by Google and Facebook. With this model now adopted by countless other retailers around the world, retail media accounts for 10.7% of all global ad spending and is on course to be worth as much as 60% by 2027. While retail might be considered the pioneering industry, other arenas such as travel, hospitality, automotive, and entertainment are beginning to also harness the power of data collaboration. With large, permissioned and loyal customer bases, these verticals are realizing the potential of their unique datasets and the valuable business insight they can offer.
As the foundations of commerce media evolve, partners will need to consider their marketing strategies, their audiences and their tech solutions in order to successfully enhance their relationship with consumers, strengthen partnerships, and add new revenue streams amid a global economic downturn.
The power of commerce media
Within the current climate, it’s critical for marketers to invest in marketing strategies that are measurable and produce results for business outcomes that benefit the bottom line. This is where commerce networks thrive, as marketers can approach their data sets innovatively and make strategic decisions based on the power of their first-party relationships.
The first-party consumer data held by certain companies is highly attractive to partners where sales are intermediated between the producer and the consumer, or in instances where industries complement each other. This is traditionally explained through the retailer and CPG example, but it translates to a variety of industries with an abundance of authenticated, loyal customers.
For example, an airline and a car hire company have an incredibly unique relationship. Through commerce media networks, these two companies can now marry up their data sets to create a holistic user experience. The airline could offer the car hire company insight into customer behavioral information, and better ways to market, such as through personalized user experiences offered through the streaming, in-flight media inventory' In addition, entertainment companies, like the owner of a cinema or concert organizer, could partner with a merchandising brand, to offer that brand insight into how consumers purchase items onsite. This is conducted without sharing consumers’ personally identifiable information (PII), and once brands unlock this capability, the opportunities for collaboration are endless.
The right technology
While commerce media networks enable partners to collaborate more closely with each other, and provide better experiences for consumers, companies need to ensure that they are investing in technologies that help them extract the most out of data in a way that protects privacy and is secure. Thankfully, the advancement of privacy-enhancing technologies (PETs), most prominently used in data clean rooms, has made data collaboration possible at scale, in a way that meets privacy policies from partners and which is compliant with evolving regulation.
Measurement capabilities
Data clean room technology doesn’t just help companies organize data, but also enables those within the clean room to activate, analyze, and measure marketing spend. In an economic downturn, marketers now more than ever need to see return on their investments, so being able to provide safe measurement and attribution of spend within a commerce media environment is vitally important.
Once the networks have been established, the data that they provide allows brands to optimize their customer preferences. As a result, brands gain better forecasting on inventory stocks and consumer demand, which is especially useful during a period of unpredictable consumer spending. Brands can also leverage audience targeting to reach new customers, as well as retain current ones through a variety of segmentation approaches. For example, as commerce media networks include transaction information, advertisers are less likely to waste ad spend retargeting to a user who has just bought the product.
Long-term commerce media success
While commerce media is an attractive proposition, there are a few considerations to think about before they’re implemented. For one, companies must first assess if they have the correct infrastructure in place to enable the safe access and activation of data. Data must also be consented by consumers and compliant with privacy regulation in order to be usable by advertisers.
Next, the brand must have enough data to achieve scale. Commerce media networks run on rich first-party data assets, and therefore there needs to be data available to launch and scale. The network should look to fill a direct need for an advertiser. Without market demand, the network will be unable to drive value. Finally, the technology solution chosen must also be able to provide granular measurement and reporting to deliver strategic insights to partners.
Ultimately, powering your commerce media network will deliver the best marketing experience for consumers, and the best results for brand partners, while ensuring your business continues to thrive through difficult economic conditions. A win-win for all.