Seeking to compete with the ad revenues of Facebook and Google, Amazon launched the first retail media network in 2012. In February 2020, Forrester predicted that more U.S. retailers would launch their own retail media networks. That’s proven to be true, with Home Depot, Ulta Beauty, Instacart and other brands hopping on board.
But the future of retail media will be very different from its past—new players and capabilities necessitate a shift in strategy. Here are three imperatives for the new crop of media networks:
1. Think outside owned channels
Even the retailers most poised for retail media networks only have 50 million monthly site visitors on average, according to Forrester’s report. Owned properties won’t be enough for non-Amazon retailers to succeed with this strategy. They need a network that incorporates both on-site and off-site advertising to uniquely reach consumers outside of their websites. This strategy actually creates demand on the retailer’s website, driving more traffic and visits from in-market shoppers who wouldn’t normally visit.
2. Focus on better identity solutions
The impending removal of third-party identifiers (3PIDs), including third-party cookies from Google’s Chrome and Apple’s identifier for advertisers (IDFA), presents a timely opportunity for retailers: an increase in value for first-party data. This is great news for on-site advertising, but (again) that’s not going to cut it. To get the scale and reach needed for an effective media network, retailers need partners that can accurately recognize and reach people off-site and bring them on-site. This is better known as a holistic identity solution—one built without cookies, designed with privacy in mind and compliant with ever-evolving regulations.
Download our guide: 3 strategies for a successful retail media network
3. Determine if in-housing presents a challenge
Most commerce companies don’t have the resources or expertise to build an in-house media network. “For these solutions to work, you need sales teams to evangelize the products, a Google-like interface to enable marketers to buy the ads and rich reporting to provide feedback to marketers on the performance of their ads,” according to Forrester’s report. While Amazon is said to have over 1,000 dedicated resources, even grocery chains would need dozens of team members running their networks. To compete with the major players, retailers should consider licensing a platform or finding a partner to power their network.
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Image credits: Daniel Grizelj / Photodisc / Getty Images