5 essential requirements for a successful off-site retail media operation

Retail media advertising promises commercial wins for everyone involved. Retailers with high-quality first-party customer data can achieve detailed personalisation. They can also generate high-margin revenue from selling ad space on their websites. Brands, meanwhile benefit from increased revenue thanks to highly-relevant ads, delivered at the point of purchase.

Retail media has so many benefits. 

Selling ad space on their websites can be lucrative for retailers, but there’s only so many ads they can sell. For that reason, retailers want to maximise off-site opportunities too. Rather than publishing the ads on their website, retailers can ask brand agencies to fund or co-fund off-site ads that drive awareness and traffic. 

Ads can run on any ad space across the open web. They can still be personalised and targeted using insights and audiences from the retailer’s first-party data. This is useful to brands and advertisers adapting to the post-cookie world. An additional benefit is that campaigns are highly-measurable. The retailer, for instance, can report back to the brand with KPIs such as the level of increased spend on their website. 

In the US, department store Macy’s provides a good example of a retailer successfully leveraging offsite retail media. The Macy’s Media Network offsite proposition was launched in August 2020. It includes programmatic display, video-connected television, online video, email advertising, in-store screens, package inserts, and billboards. Macy’s says its Media Network generated $105m in net revenue across its offerings in 2021. 

Retailers are keen to emulate high-profile success stories like this. They are using platforms such as CitrusAd to leverage the latest automation techniques and keep refining their on-site and off-site retail media offers. 

Here we list and analyse the five steps retailers and brands must take to ensure a successful off-site retail media operation:   

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1. Strike a balance between the supply and demand of retail media

With on-site retail media, larger retailers can offer brands the opportunity to sponsor product verticals or categories across the site. If there are, say, over 300 brands on a retail site, there is the bandwidth for the retailer to monetise that channel, selling ad tenancies on its web pages.  

An electricals chain could sell brands such as Beko or Bosch a ‘tenancy’ of their entire website fridge and freezer section, with ads showing on every page. However, if only four brands in total sell through those pages, the benefit of a tenancy to the sponsor brand will be limited.

In a situation like this, the brand might see higher returns from personalised ads programmed on an impressions-basis, using on-site and off-site channels, but still using the first-party retailer data in both cases.   

While many larger entrants began their retail media initiatives by monetising their owned channels, many small or mid-size players have used off-site channels to scale their retail media presence quickly. This is of particular benefit for retailers with limited brand partners who have maxed out onsite retail media. 

Our view at Epsilon is that off-site supports players of all sizes because it both extends a company’s reach to a larger in-market audience and drives those users to the company’s own website, helping scale its on-site business.

For retailers, it is beneficial to join forces with dedicated brand partners who understand their ecosystem. Smaller long-tail retail brands can then activate campaigns cost effectively. 

 Both brands and retailers should carefully address the balance between media supply and demand both onsite & offsite, to strike the greatest level off efficiency and relevance to the consumer. 

2. Ensure you can accurately measure retail media performance

The ROI on retail media can be easily measured. Such channels can be geared towards meaningful, conversion-based outcomes. Thanks to advanced platform solutions, retailers can provide brands with all the metrics they need to track the progress of campaigns.

At Epsilon, we use incremental return on ad spend (iROAS) as a key metric. It’s not uncommon for a brand to see three to four times ROAS with an off-site retail media campaign. IROAS can be measured in isolation, over and above existing paid media channels. 

There are soft KPI measurements too. CTR (click-through rates) will measure the level of direct engagement a brand’s ads have achieved. While VCR (Video completion rate) measures the percentage of people that have watched the entirety of a video ad.

Other metrics, such as last-click attribution, are hard to apportion when you have several different paid media and organic marketing campaigns playing out at once.   

Agencies specialising in off-site retail media provide brands with forecasts charting the predicted ROI of campaigns. They then work towards these agreed targets and can feed back on progress over a specified timeframe.  

3. The importance of taking a flexible approach to your retail media operation

If an off-site retail media campaign is not performing for a brand, it can be adapted. Flexibility is easily built in. For example, if ad spend is not achieving the desired return, the retailer can adjust their pricing and elements of the campaign.

New audiences can be found and targeted. It’s very much about getting the right mix of exposure levels and audience engagement for any particular brand.  

However, not all products have a purchase frequency which merits continued off-site retail media ad activity.  A higher price point can in some instances result in slower consumer purchase cycles. For instance, hearing aids are quite expensive and not purchased regularly. The purchase lifecycle is between three to ten years. This is where flexibility comes in.

Agencies can adapt the service they supply to specific timeframes and purchase cycles, so that the maximum returns are achieved, and ad spend is not wasted. Off-site retail media campaigns should not be considered a constant – rather a digital marketing activity to flex around known customer behaviour data.   

Time and channel are two other key areas where flexibility pays off. A customer may usually buy a product late at night after several visits to the retailer’s site on their mobile phone, for example. Seasonality is also important.

Does your customer spend big at the month-end after payday?  Or are they more actively spending during sale seasons? Working with Epsilon enables brands to activate their first-person data at scale, delivering personalised ad content omni-channel. 

4. Ensure your retail approach is future-proofed 

In this era of economic uncertainty and saturated markets, futureproofing is essential for both brands and retailers. The rules of digital marketing are changing. Brands can no longer rely on third-party cookies to inform their re-targeting programmes. An effective retail media solution should be able to adapt according to consumers’ individual requirements, without a reliance on third-party cookies. 

As a result dynamic content optimisation (DCO) can be served to users, reflective of products that are of most relevance or interest to them.  

You can use shopper data to spot customers interested in environmental issues, particular sports, or crafting, for example. Brands can use retail media channels to focus on the green benefits of products, upcoming sports events, or the latest crafting trends. Other customers may respond positively to well-being messages or home improvement-related messages.  

Time and channel are two more considerations. A customer may habitually buy gifts late – on the eve of Mother’s Day or the weekend before Christmas. A fitness fanatic may buy new trainers every six months after several views on their mobile phone. Another invests in new swimwear every spring. Effectively leveraging customer ID insights is key to enable retailers to future-proof digital marketing. 

5. Organisational readiness and the desire to integrate 

‘Organisational readiness’ is a buzzword in business today. It recognises that not all companies have the tech support, know-how, and corporate culture to push forward with the latest innovations.  

With digital marketing moving fast, brands must evolve their mindsets to move with the times and try something new. Existing commercial relationships might need to be adapted. Brands’ sales teams may take a while to buy into the concept of off-site retail media advertising.   

Launching a brand’s off-site retail media advertising programme takes time. Even with the organisational readiness and a desire to integrate in place, sometimes it can take up to six months to be up-and-running. Data onboarding and integration, testing, and data compliance procedures must be carried out.

A great deal of work goes into activating the retailer’s first-party data and implementing all the steps needed for a successful, targeted campaign.   

All stakeholders involved must be ready for an exciting new revenue-driving venture. But there should be an acknowledgment that this is not a quick fix. Rather, it’s a complex integration project, which requires multiple stages to set up.   

Be sure to invest in a data-led solution, so that you are targeting real people, in real-time. For the end-users to actively engage, you need to be working with unique individuals. That comes down to the quality of the data platform behind any retail media activity.  

If the client data being activated is reliant on a single source, such as an email address or a device ID, it's reliant on a probabilistic outcome to identify and match a customer. CitrusAd deterministically identifies a user based on multiple online and offline attributes, with a single view of attribution, regardless of where your customer purchases.  

Retail media success is an ambition worth having  

Retail media is ‘The $100 Billion opportunity’ according to Boston Consulting Group. It has also been described as ‘digital advertising’s third wave’. Whatever terminology is used, retailers and brands cannot afford to miss out.  

In straitened times, both on-site and off-site retail media represent powerful revenue channels. Sitting the game out will be dangerous, and those who do risk falling behind.   

Find out more about CitrusAd – the first retail media platform to unite on-site and off-site capabilities.