2022 has been called a breakout year for retail media, and things are only looking up. Forrester Research Inc. forecasts that the retail media market will more than double in four years to reach $85 billion by 2026, according to “The Marketer’s Guide to Retail Media,” published on Feb. 1, 2023.
If history teaches us anything, however, it’s that explosive growth is often accompanied by fraud. Everyone wants to get on the gravy train, and retail media is no different. Many retail media solution providers are overpromising and underdelivering, leaving both retailers and brands frustrated.
To make sure your retail media is on the up and up, here are four common myths debunked.
Myth No. 1: The higher the number, the greater the reach
Some solution providers tout impressive numbers when it comes to their ability to reach people, but devices and email addresses are not real people.
There are more than 200 million adults in the U.S. who, on average, have more than four active email addresses and multiple devices. First, not all of those emails are in use. Many people have old email addresses linked to them that they never use but are technically active. A retail media network may seem like a great option if it claims its reach is 500 million or 700 million. Remember, five email addresses does not equal five people; it’s one person tied to five emails. You will not get the reach promised and instead will end up with a lot of wasted impressions and costs that lead to underperformance and frustrated customers.
Reality check: Quantity doesn’t always equal quality.
Myth No. 2: Retail media only happens on a retailer’s website
If you’re waiting for people to visit the retailer’s website, it’s too late.
Epsilon ran an analysis for one of its retail media clients and found that 46 million of the 53 million consumers (88%) in the client’s file could only be messaged across the open web. It’s a scary number, but one that repeatedly comes up in Epsilon’s evaluations. Only a small fraction (10-20%) of people organically shop on retailers’ owned digital channels on a regular basis; the rest is in-store. This means brands are missing 80-90% of their customers online if their retail media networks are not optimized for on-site and off-site. Beware of solution providers that call retargeting “off-site” because they are only messaging the limited people that visit the retailer’s site and not new people who will drive reach and performance.
Brands want to message more unique people. The only way retailers can meet this demand, and provide maximum reach, is by ensuring their retail media networks offer unified on-site, off-site and in-store capabilities. Off-site advertising powered by retailers’ rich first-party data improves brands’ marketing performance while providing retailers and brands with organic scale to drive more on-site shoppers. It’s a win-win for all parties.
Reality check: If retailers aren’t driving off-site demand, you’re leaving revenue and performance on the table.
Myth No. 3: Retargeting is an effective retail media strategy
Retargeting is retail media’s dirty secret, and the industry needs to clean it up.
Pretty much everyone has been chased around the internet by a product they looked at once or already purchased. Over-frequencing people isn’t going to get them to buy more. It’s going to annoy them.
Too many retail media networks lack the holistic identity solutions needed to reach real people, which is why they use retargeting for their off-site capabilities. The problem is—and it’s a big one—retargeting doesn’t help brands reach new customers.
Retail media networks must be grounded in a strong, people-based identity solution that spans multiple channels and devices if they’re going to deliver the type of personalization, relevance and performance brands require. Brands want to message more unique people to drive sales and performance in their retail media campaigns, not drive more impressions.
Reality check: Companies use retargeting amplify spend, not message more unique people.
Myth No 4: CTV is new to retail media
It may be new to some companies, but CTV certainly isn’t new to the industry.
Epsilon has helped brands use retailer data to reach their customers at the moments when they are most receptive, regardless of device and channel. CTV is no different. Like programmatic display, brand marketers can strategically use CTV to reach lapsed buyers or new prospects.
Video comes with the added benefit of allowing brands to communicate more effectively when messaging new buyers or launching a new product line to existing buyers. When media is activated on platforms powered by people-based identity, not cookies or devices, marketers can confidently see how CTV contributes to sales with connected measurement.
People experience brands across multiple channels and devices. The retail media solutions that can connect those experiences across all devices and channels, and tie everything back to sales, are the ones that will ultimately attract brand dollars.
Reality check: Brands have used retailer data to activate media across channels for decades.
Questions to ask when evaluating a retail media network
Don’t ignore your intuition the next time you’re evaluating a retail media network and something seems too good to be true. Here are four questions to help you along the way:
- How many unique people (not email addresses or cookies) will I be able to reach?
- Can I reach those people if they’re not visiting the retailer’s website?
- What channels can I use to message people across the open web?
- How do I manage costs and reduce waste?
Separating fact from fiction is never easy, but it’s easier than regretting a million-dollar mistake.
This article was originally published on Adweek, February 2023.
How Epsilon can help you to develop your Retail Media stratgy?
At Epsilon, we can help you build a marketing approach that allows you to take advantage of the new opportunities retail media networks are creating. We offer a turnkey retail media network solution, CitrusAd, that can drive up to 40% more shopper reach.
Plus, our skilled consultants can help you build a digital advertising plan to reach and engage with consumers where they are and achieve your goals with measurable ROI.
Ready to hit the gas pedal on your digital growth? Contact Epsilon today!