<img src="https://secure.nice3aiea.com/154254.png" alt="" style="display:none;">


5 tips for a balanced & profitable retail media offering

This revenue stream barely existed for retailers three years ago. Today, however, retail media networks (RMNs) are proving lucrative. In February 2022 Amazon revealed its ad sales revenue was worth $31 billion for the prior year.

But how can you follow Amazon's lead, building targeted ad sales ventures via your RMNs? If you get it right, opening your existing digital platforms to external brand advertisers is a winner.

Retailers and online marketplaces in the US sold $40 billion in retail advertising in 2022. This number will more than double in the next four years, reaching $85 billion by 2026, according to Forrester Research.

How can you optimise this fast-growing opportunity? And should your RMN remain ‘owned’, or ‘operated’ by an external platform?

RMNs are a burgeoning channel

Retail media is the talk of the digital advertising world. Brands love it because buying ad space on e-commerce websites and marketplaces ensures their products get seen and are sold.

They can rise to the top of search results or offer special promotions across thousands of different platforms. These include CitrusAd powered by Epsilon, Amazon Ads, Walmart Connect, Instacart Advertising, Aldi, Wayfair, and many more. 

Wherever a brand sells products online, there's a RMN option for earning more attention and boosting sales. The retail media model is attractive because it:

  • Enables targeted transactions
  • Allows for closed-loop attribution 
  • Doesn't involve problematic third-party cookies

RMNs have powerful targeting capabilities 

Established retail companies are maximising their website earning potential by selling sponsored product placements, display ads, and full brand pages. Once an interface for media selling has been set up, retailers can start driving revenue. It’s an income you’d be crazy to pass up – especially when competition in the market is so tough.

Retail media advertising delivers real value to brands too. FMCG marketers have embraced the closed-loop attribution that retail marketing provides. 

And the FMCG community applauds the powerful targeting capabilities, and the use of retail shopper data that RMNs provide. Paid search and product ads make it possible to identify shoppers by their intent. This provides marketers with a way to attribute promotional spending to sales. 

What do you need to succeed with a Retail Media Network?

Any retail media network (RMN) looking to scale must master many skills. These include sales, audience strategy, media activation, reporting and insights. A big question for your RMN teams is whether to opt for the owned or operated model.

The answer isn’t straightforward. There’s no one-size-fits-all approach to achieving great things with your RMN. 

With the owned option, you can build your tools. Or you can buy pre-existing capabilities to help you manage the network in-house. You keep control. But this takes time and effort to set up. There are elements of risk. Some retailers are choosing the operated model. This means working with a specialist platform partner who brings a wealth of digital marketing expertise.

Each strategy has its merits, and a single RMN can mix and match its approach across different tools and technologies. 

5 Key Considerations for a Balanced & Profitable RMN Business


Skills and Resources 

Retailers are amazing merchants. But they are not publishers. You probably rely on IT professionals to run your supply chain systems, merchandising, e-commerce, and infrastructure technology. But you may struggle to recruit and keep the specialist data scientists, developers, and coders needed to launch and operate an RMN as well. With the operated model, your RMN partner is set up with the personnel and expertise to make sure you succeed.

With the operated RMN model, the service fee will include a tech team, an account management team, and a sales team all working on your behalf. Companies speaking to Epsilon considering our CitrusAd product tell us: “I’d love to tap into this new revenue stream. But I don’t have the resources to get RMN sales off the ground.”

Going down the operated route means all the tech development work is taken care of. A great deal of coding, API integration, CRM data activation, cleaning and analytics is required before money can be made with RMNs. 

For smaller and medium-sized retailers, operated is perhaps the safest option. Operated is often seen as a point of entry to RMNs so that retailers can see what’s viable, and start generating ROI. 


Pace of Growth 

If you are keen to scale your RMN, the operated model is probably best, for the reasons outlined above. At CitrusAd, we’ve been able to help retailers get a foothold in this growing market, and achieve profitability at pace. 

Building an owned RMN involves navigating a steep learning curve. It may take a few years to climb, and there will be setbacks along the way. Retailers tend to take a fast-track route with operated. They can leap-frog pitfalls, as these have been designed out by the chosen platform.  

An important part of RMN work is reporting. This takes time and a great deal of testing to master and fine-tune. Operated RMNs smooth the process.  CitrusAd powered by Epsilon will provide a clear view of SKU-level attributed sales. Such insights can then be used to help brands justify increasing their budgets, immediately fuelling growth for the RMN.

Omnichannel retail presents many retail media opportunities. The operated model makes it easier to perform across all channels. Any gaps in communication points, shopper contact info, CRM data fields, and lost revenue can quickly be realised.


Shopper Reach 

Retailers generate valuable first-party audience data, and brands are eager to gain access to this treasure trove. But retailers will need to nurture and utilise the data with care.

When creating a retail media platform from scratch, establishing your identity strategy is key. You must begin with the ability to identify customers and grow their data set. Loyalty cards, CRM platforms, or payment data can all be deployed. Having a clearly defined strategy will attract brands to work with your RMN. With owned you have all this data at your fingertips. You can monetise it in new and innovative ways. But you need to have the skillset and resources to do so. 

On the downside, you won’t have the breadth of data that the operated model can offer. Your internal team might not be skilled enough in data analytics to maximise all opportunities. 

Some RMN specialist agencies have deep data lakes that can be utilised to super-charge shopper targeting. For instance, with CitrusAd, the platform can take learnings from Epsilon’s connected shopper ID data repository, and differentiate between shopper sub-categories.

For example, Mac versus PC users can be identified. This will be of interest to computer brands looking to take banners on an electrical retailer’s laptop web pages. Dynamic advertising, with tailored messaging, can be scheduled so the right people see the right ads, at the right time. 


Compelling Offer 

Is your offer to brands going to be compelling enough? Advertising on retailers’ digital platforms is an attractive proposition for many brands. They seek future-proofed media planning, execution, and measurement in a cookieless online advertising setting.

For brands lacking access to first-party data sets, RMNs are a treasure trove. They offer differentiated, consented datasets, which put brands within reach of high-intent shoppers.

FMCG brands, for example, are facing pressure and disruption from digitally native direct-to-consumer competitors. They urgently need to take advantage of retailer consumer first-party connections.

Timely, relevant messaging can be integrated natively into the customer journey through onsite search and product category pages. Taking an omnichannel stance, this messaging can even be served as in-store digital signage.

The CitrusAd integrated platform supports brands further by helping them identify and acquire new shoppers. These shoppers can be driven to specific actions, such as signing up for rewards, downloading the brand app, or subscribing to email marketing. 


Degree of Control 

A big win with owned is that it offers control over a system’s architecture, scalability, and capabilities. Audience strategy and analytics are key differentiators in the RMN space. Retaining control means you have more options to create and deliver in line with advertisers’ evolving needs, and your product niche. Keeping control might suit those retailers concerned about data governance, or risking competitive advantage.

Many retail executive boards want control over timelines and how agile they can be. Ownership of reporting and activation capabilities, for example, may suit a company that has grand plans for its RMN and is committed to investing time and internal resources to hone its in-house operation. 

Customisation – adding value to the RMN’s functionality over time – is a plus point with owned. But as mentioned earlier, organisational design and resource constraints may hamper such plans.

We recommend you dig further into questions about why control is important, and where you want to be in five years with your RMN. Gartner predicts retail media will not be widely implemented for at least five to ten years.

It’s still an emerging digital advertising channel. Evaluating the importance of control in the context of your wider marketing vision, will help you weigh up the trade-off between owned and operated.

In summary: Stay flexible and watch the market   

The choice between owned and operated depends on your ambition. Weigh up your strengths and weaknesses. The more you can own, the more power you have over that aspect of the business. But there’s a trade-off in time and resources when you choose to build rather than partner. 

In reality, this is not a straight choice between owned and operated retail media networks. There will be instances when the selection is a little more subtle.

For example, operated may be a prudent initial step, before going fully owned once the revenues come rolling in, and the channel becomes self-funding. Keeping a degree of flexibility – and an eye on the market - could be the wisest way forward.

How can Epsilon help?

Is your company struggling to generate value during the recession? Epsilon’s single turnkey retail media solution will help you achieve 30% – 40% more shopper reach and maximise your revenue on all fronts. 

>> Ready to launch your Retail Media Network? Get Started Here <<