Retail media networks* have progressed from the “new channel” phase a few years ago to the trendy phase to becoming an integral part of today’s marketing budget for many brands.
In 2016, $1 billion was spent on retail media in the US, eMarketer reports. That figure grew to $30 billion by 2021 and nearly $55 billion by the end of 2024. Retail media networks are on pace to account for 21.8% of all media spending by 2027.
As ad dollars have flowed into retail media networks, so has the number of opportunities. (Or, maybe have the expanded opportunities spurred more spending? It’s a classic chicken-or-egg question.)
Just a couple of years ago, RMNs primarily consisted of retailers like Amazon, Walmart and Target, plus those from clothing retailers, department stores and pharmacies. Today, you can also find RMNs in grocery stores (such as Kroger and Giant Eagle), retail category specialists (Home Depot), delivery services (Instacart) and discount warehouses (Costco).
Beyond retail
As RMNs and adtech overall have matured, more opportunities have presented themselves – such as rolling in connected TV – to reach beyond a retailer’s digital and physical properties with first-party data.
“It’s a significant step beyond traditional display ads and sponsored product listings, particularly for marketers who want the storytelling capabilities of TV, but with more audience targeting precision,” Yahoo’s Mike Merna tells a Forbes contributor.
Inmar Intelligence’s Leah Logan says the “retail media network” definition will continue to grow.
“In 2025, we expect to see more RMNs include in-store (both digital and physical signage), CTV and creators as vital parts of their media strategy. These channels provide more opportunities to unlock full-funnel advertising, particularly upper-funnel brand marketing efforts, unlocking the bigger budgets held by national brand marketing teams that RMNs are looking to win,” Logan tells Forbes.
TRG’s Scott Luther cautions that, with the growing opportunity within retail media, brands still need to be strategic.
“The major strategic consideration is how much you have to invest in on-property – things like product listing ads, search ads and other inventory within the owned shopping environments (mobile app, website, email, etc.) – versus using the RMN’s first-party data to advertise to specific audience segments elsewhere online (including walled gardens),” Luther says.
It’s still about the data
Of course, with or without Google browser cookies, first-party data is key in marketing, and it’s the strength of retail media.
“The first-party data from retail media networks gives brands reliable insights into shoppers’ histories and behaviors. This data allows brands to reach shoppers with tailored messaging at crucial points in their shopping journey,” said Gaurav Pant, chief insights officer at Incisiv.
However, Pant cautions, as with other advertising media, brands have to make sure that the RMN’s first-party data suits their needs. That means, there needs to be a large enough shopper base, offer targeting options to reach the audience you want, offer seamless integration across digital and physical channels and the interface is user-friendly.
Another strength of retail media is the one-stop shop opportunity for omnichannel marketing.
“A cohesive omnichannel approach is essential,” Pant said. Brands should look for an RMN that offers:
- Unified data platforms for a holistic view of online and in-store shopper interactions.
- Consistent creative assets to ensure the same brand look and feel and messaging across all channels.
- Omnichannel targeting to track and engage with shoppers.
- Closed-loop analytics and measurement for accurate campaign reporting, even among distinct campaigns.
Retail media challenges
Still, with the growing opportunities within retail media, challenges remain. An IAB study found that with more opportunities comes increased complexity, with 69% of RMN ad buyers saying they want a simpler buying process.
That same study also found that inconsistent measurement standards were a top challenge for 62% of RMN ad buyers, with almost 60% of them saying better transparency is needed.
AI in RMN
As it is nearly everywhere else in marketing, AI can improve a brand’s performance in retail media. EMarketer has a primer on how AI will improve retail media targeting personalization, including inventory data into ads so brands are not promoting an unstocked item and drilling down into the data to maximize its value for your campaigns.
RMN as the be-all, end-all?
Let any advertising tactic, retail media has to be weighed within the confines of a brand’s objectives.
“Use the tactics RMNs offer intentionally. RMNs serve best for capturing demand from in-market shoppers, who are already likely to buy,” says TRG’s Luther.
“You must maintain a healthy balance of other tactics for growing demand and building a brand outside that path to purchase,” Luther says.
* Retail media networks are retailer-owned platforms that are online (their websites and apps) and in-store. They enable advertisers to connect with shoppers via shoppers’ data (first-party, purchase history, etc.).
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