Marketing budgets are flowing toward retail media networks (RMNs) as retailers, from Amazon to big-box stores to grocery chains, capitalize on the shift to e-commerce while offering advertisers unique audiences and valuable data insights to build new high-margin businesses. Manufacturers and brands are increasing their ad spend on RMNs because they offer unique, valuable audiences and provide data that measure ad effectiveness, thus helping to close the loop between ad view and product purchase.
Despite this success, retailers and advertisers alike question the trajectory of retail media. How sustainable is the growth of RMNs as an advertising channel? How much space remains for RMNs other than Amazon? Is the marketing spend on retail media really new or merely a shift from marketing budgets that already benefit retailers, such as shopper and co-op marketing?
Our latest Retail Media Networks Advertiser Survey helps answer these questions and exposes five widely held beliefs about RMNs as myths. The accompanying charts further illustrate the retail-media reality and the opportunities it provides for brands, manufacturers, marketers, and retailers.
Myth #1: Retail media is an Amazon-only story
Myth #2: RMN is a CPG-focused phenomenon
Myth #3: RMN spend comes from dollars retailers already earn
Myth #4: RMNs are mainly a substitute for lower-funnel or shopper marketing
Myth #5: Enabling advertisers to self-serve gives RMNs a major competitive advantage
What this means for retailers
With these myths dispelled, now is the time for retailers to embrace the future of retail media. Leaders can take initiative with the following five actions:
- Dive in. The best way to start is to just get on with it. Retailers should take an agile approach with a cross-functional team (for example, marketing, tech, data, and merchandising), treat early failures as the price of new knowledge, and share positive results and learnings with their organization and its advertisers.
- Capitalize on uniqueness. What separates your RMN from the pack? Is it your audience and associated customer insights? Is it your brand or e-commerce experience that makes advertisers want to join? Your chosen minimum viable product (MVP) feature set has implications for your team’s skill set and for which tech, operations, and agency partners are most appropriate. Plan properly to add value for all players in a distinctive way.
- Rally the organization. Buy-in to the RMN vision from key parties—marketing, merchandising, e-commerce, product, and analytics—is critical. Tell a compelling story that shows how the proposed RMN will drive the core retail business and e-commerce. Develop a plan to leverage internal and external resources to implement it.
- Choose the right partners. Leaders must determine who will be responsible and accountable for key RMN activities, across sales, managing supply and demand, planning campaigns and making buys, and delivering on reporting and measurement? How will these differ across key ad-inventory types, such as sponsored listings, onsite display and video, or offsite audience targeting? Partners with the right underlying capabilities and mindsets to help build the RMN business are crucial.
- Build a media business. The retailer’s plan must recognize a simple truth: there is a business to build beyond simply enabling ad products. It entails financial planning, billing and reconciliation processes, legal and accounting ramifications, and new processes around campaign planning and execution. Media customers expect many of these behind-the-scenes capabilities, and brands, too, demand credible media expertise and sound campaign operations.