Retail Media is a form of advertising whereby brands place ads across a retailer\u2019s shop to influence consumers (who are already low in the funnel) to buy their products. Think of the time-honored tactics that supermarkets apply to promote specific offers: Manufacturers pay to get their discounted products into the supermarket, for example to be visible in a premium spot on the best aisles. These premium supermarket spots can usually be found at eye level in the front of the shelf, so they\u2019re easily seen by consumers. Similarly on web shops, advertisers also want to utilize the most relevant promotional spaces. In most cases, when you open an online store most of what you\u2019ll see is retail media \u2013 whether you realize it or not!<\/p>\n\n\n\n
In other words, it may not always be obvious, but digital retail media is everywhere. Aside from on homepages, you can also find it on search pages, category pages, or product detail pages. <\/p>\n\n\n\n
The growth of the retail media market<\/strong><\/p>\n\n\n\n Worldwide, Statista<\/a> projects that digital retail media advertising spending will grow from $121.88bn in 2023 to $133.06bn in 2024, and $144.41 in 2025. In the US, it\u2019s estimated that retail media will be worth $50bn by 2023. Meanwhile, in Europe, a 2022 report<\/a> by IAB Europe and Microsoft reveals that 92% of advertisers and 74% of agencies are currently partnering with retailers to reach consumers. Of the small amount that aren\u2019t, 88% of advertisers and 77% of agencies plan to partner with retailers in the next 12 months. <\/p>\n\n\n\n Why is retail media growing so much? Two trends to explain<\/strong><\/p>\n\n\n\n While retail media is by no means a new phenomenon \u2013 it has been part of trade marketing<\/a> deals for decades \u2013 it\u2019s gaining significant ground more than ever before. This begs the questions: Where does this growth come from? And why, as a marketer, can you no longer ignore it? <\/p>\n\n\n\n Trend 1: The explosive growth of e-commerce<\/strong><\/p>\n\n\n\n It\u2019s no secret that when the Corona crisis broke out in early 2022, e-commerce saw explosive growth. <\/p>\n\n\n\n But what does the growth of ecommerce have to do with retail media exactly? Well, not only is there much more money involved in e-commerce than before, but web shops are also processing an increased volume of traffic. And the more the traffic, the more interesting it is for businesses to advertise. <\/p>\n\n\n\n Traditionally, it\u2019s been publisher sites and apps, along with social media platforms, where the lion\u2019s share of online traffic could be found. However, the websites of online retailers are now also major traffic handlers. And as a marketer of products sold at these retailers, that\u2019s exactly where you want to advertise: low in the funnel.<\/p>\n\n\n\n Trend 2: The rise of first-party data<\/strong><\/p>\n\n\n\n Another one of the key reasons why retail media is blowing up is because buyers see it as a solution to the depreciation of third-party cookies. In the face of the cookie-less era, retailers have a second asset in their hands that gives them an edge over traditional publishers: first party data. <\/p>\n\n\n\n Publishers who are well prepared for a world without cookies are already shifting their focus to first-party data. However, it\u2019s retailers that have a much easier time collecting first party data. After all, visitors to retailers are customers with order histories, wish lists, known shopping behaviors and other relevant data. Retailers have the perfect data to enable targeted campaigns. Think of, for example, Amazon, which is one of the biggest retailers in the world. In 2022, Amazon had over 310 million active users<\/a> worldwide. Every day, hundreds of millions of people shop on Amazon and use Amazon products. This naturally translates into an enormous amount of first-party consumer data that Amazon has been collecting for years.<\/p>\n\n\n\n Budgets now spent on third-party cookie-based retargeting campaigns are therefore increasingly shifting to partners with valuable first-party data. Scaling is the next step. While 91% of surveyed buyers<\/a> have a first-party data strategy in place, 49% are still working on how to scale these strategies. <\/p>\n\n\n\n What is a data clean room and why is it so valuable? <\/strong><\/p>\n\n\n\n As changing privacy legislations continue to disrupt the market, there are significant developments in the works to help businesses adapt. This is where data clean rooms come in. Selling or buying customers\u2019 personal data on a one-to-one basis between manufacturers and vendors is simply not allowed (anymore), so how can businesses implement customer-centric strategies with such limited access to critical customer data?<\/p>\n\n\n\n Let\u2019s talk about Data Clean Rooms<\/strong><\/p>\n\n\n\n Consider these two parties: The Retailer and the Advertiser. Let\u2019s say both parties are processing relevant data into their respective data warehouses. A data clean room is where data sourced from different warehouses can get matched with each other based on identifiers (e.g., e-mail addresses). After they get matched, the data clean room can then spit out consumer data in an aggregated and anonymized way. <\/p>\n\n\n\n With a data clean room, advertisers and retailers can share insights with each other, learn more about their target audiences, enrich customer segments, and \u2013 if identifiers can be matched \u2013 get even broader insights for conversion. This all happens without a single cookie involved, and without that data being traceable back to individuals. <\/p>\n\n\n\n An example of how data clean rooms work:<\/strong><\/p>\n\n\n\n Let\u2019s look at John Doe. John lives in Amsterdam, is 35 years old, has an interest in gardening, and regularly shops for gardening supplies. John constantly sees ads from his favorite gardening supply company, The Gardening Company. He likes to buy The Gardening Company\u2019s products both from their website, but also on Amazon. <\/p>\n\n\n\n In this case, the retailer is Amazon, while the advertiser is The Gardening Company. Because John has purchased from both parties and has given his consent to each of them to store his data, this means both Amazon and The Gardening Company have information about him such as his email address, which is a unique and, in this case, shared identifier. Both Amazon and The Gardening Company store John\u2019s data in their respective data warehouses. <\/p>\n\n\n\n Now, let\u2019s say there are thousands of people like John \u2013 they live in the same area, are around the same age, and share similar purchasing behaviors. These people are incredibly valuable to both the Retailer and the Advertiser. However, if neither The Gardening Company nor Amazon can access insights on these people (demographics, preferences, shopping behavior, etc.), then they can\u2019t create truly effective and customer-centric business strategies.<\/p>\n\n\n\n Now, because neither the Retailer (Amazon) nor the Advertiser (The Gardening Company) can\u2019t legally share, sell, or buy John\u2019s personal information, what can they do? They put the data they do have into a data clean room. The data clean room can then anonymize the data put in, match it with data from other data clean rooms, and churn out anonymized yet actionable insights and audience segments. This way, both Amazon and The Gardening Company get insights about people like John (demographics, preferences, shopping behavior, etc.), without actually accessing anyone\u2019s personal information. <\/p>\n\n\n\n Data clean rooms are great tools retailers (e.g. Amazon) and advertisers (e.g. The Gardening Company) can leverage to gain valuable consumer insights whilst avoiding privacy violations. Both parties would only be able to only access their own data, but in a way that is significantly enriched by the data of others who match it. <\/p>\n\n\n\n The evolution of retail media<\/strong><\/p>\n\n\n\n Back in the 1980s, snack manufacturers were eager to have their offerings next to the alcohol shelves of the supermarket. These kinds of strategically placed ad deals have always been part of trade marketing, providing additional revenue for retailers on top of the products they actually sell. Retail media has since infiltrated the digi-verse and is now the norm online, too. The homepage and newsletter of any supermarket chain, for example, consists almost entirely of retail media and trade marketing.<\/p>\n\n\n\n But the development doesn\u2019t stop there. Retailers are already experimenting with new forms of retail media. For example, the Netherlands\u2019 largest supermarket chain, Albert Heijn, is introducing ads on its handheld scanners, and others quickly have followed. In fact, more and more retailers are offering their own digital out of home (DOOH) solutions. The remarkable thing about DOOH is that it also allows brands to advertise other brands that do not sell their product via the retailer in question. This is called non-endemic advertising. Think of a car brand that advertises in the supermarket because its target audience is well represented there. Or a travel insurance company (doesn\u2019t sell physical products) that advertises on Amazon, perhaps on the product detail pages of a travel backpack company. In such a case, a retailer explicitly takes over the role of a traditional media network.<\/p>\n\n\n\n The sharply increasing interest in retail media advertising is rapidly developing new advertising opportunities. This doesn\u2019t only make retail media more interesting for retailers and brands, but also for customers who can get more valuable ad experiences. IAB Europe expects retail media budgets to equal those of television campaigns by 2026 at 25 billion euros<\/a>.<\/p>\n\n\n\n Don\u2019t miss out on additional revenue<\/strong><\/p>\n\n\n\n To put it simply: Any retailer not yet doing anything with retail media is currently missing an opportunity for additional revenue. The same goes for any manufacturer or brand that has not yet set aside a marketing budget for retail media advertising. Marketing with third-party cookies or with publishers without relevant data is becoming less and less effective.<\/p>\n\n\n\n Spending advertising budgets on publishers with a lot of relevant data, including on retailers, gives marketers the opportunity to offer their products to relevant target groups using their partner\u2019s first-party data. This, meanwhile, doesn\u2019t hurt those retailers, because in addition to margins on product sales, they now also pocket retail media budgets.<\/p>\n\n\n\n Retail media advertising is undoubtedly going to explode. The best time to make it work, for both retailers and brand marketers, is now.<\/p>\n\n\n\n —<\/p>\n\n\n\n For more information,\u00a0get in touch with our team of seasoned experts at Incubeta<\/a> or explore our range of interconnected capabilities<\/a> that feed into your marketing strategy, andhelp you outperform<\/a>.\u00a0<\/p>\n\n\n\n <\/p>\n","protected":false},"featured_media":0,"template":"","kb_category":[256,290],"market":[],"class_list":["post-17015","knowledge-base","type-knowledge-base","status-publish","hentry","kb_category-retail","kb_category-retail-media"],"_links":{"self":[{"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/knowledge-base\/17015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/knowledge-base"}],"about":[{"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/types\/knowledge-base"}],"wp:attachment":[{"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/media?parent=17015"}],"wp:term":[{"taxonomy":"kb_category","embeddable":true,"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/kb_category?post=17015"},{"taxonomy":"market","embeddable":true,"href":"https:\/\/incubeta.com\/it\/wp-json\/wp\/v2\/market?post=17015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}