Getting the approach to retail media right will be crucial for brands and marketers looking to navigate the cookieless world, explains Regina Ye, CEO & Co-Founder of Topsort
Retail media has really taken off over the last few years and it doesn’t look as though that is about to change any time soon.If you've never heard the term before, it’s the advertising you see within a retailer's websites and apps. While in the past the placement of ads on websites revolved around third-party cookies tracking users around the web, after those are switched off brands, marketers and retailers will in future have to rely on first-party data.
If you feel like this has come from nowhere, it has been around a lot longer than you may think. Amazon pioneered it, launching what is considered to be the first retail media network in 2012. Shoppers browse through items and search for specific goods on the Amazon website and through its mobile app, generating first-party data that allows it to deliver personalised results.
Other large retailers have since got in on the act, with Walmart growing its ad business revenue by 240% over two years. It's not surprising that it's been so successful; the first-party data generated offers retailers the ability to serve customers highly relevant, personalised adverts, boosting loyalty and helping to grow revenue.
Retail media has already come a long way, but still has a great deal of potential left. In today's connected world, shoppers use online and mobile channels as well as visiting stores in person. There are many factors that affect our purchasing decisions and marketers that can connect the dots and create truly omnichannel retail media experiences for customers will reap the benefits.
With all this in mind, getting your approach to the fast developing world of retail media may seem daunting, but it really isn’t. Here are five key steps to understanding the power of retail media and how to get the full benefit from:
1) Make sure you have relevant, quality content
One of the essential pieces of the retail media puzzle is ensuring that content is both high-quality, and relevant to the consumer. Retail media platforms want the brands that advertise with them to chime with the target audience; they also want to display ads that look professional and in keeping with the aesthetics of their website or app. As a marketer you need to think in a similar way and aim to work with the right retailers and publishers – those with a relevant audience and that produce high-quality content.
2) Do your homework and find the right retail media platform for you…
Retailers make their money from brands paying to promote their products and listings, so the easier a retail media platform is, the better for brands and marketers. While some brands have specialist advertising teams that create campaigns full-time, mid-sized and smaller vendors often don't have the ability to do this. Therefore, brands should do their homework and find a retail media platform that is intuitive and does not require a huge training programme to use. To get a good feel for a retail media platform, look for those offering free ad credits to get started – so you can test out your campaigns and see the results and the return on ad spend [ROAS] quickly.
3) …but also assess if you need your own retail media network
As mentioned above, success in retail media requires an omnichannel approach. You need to be selling and advertising across multiple channels, through your website and app, social media and in-store. With this mindset, a fundamental question arises – if you’ve the scale, might you need your own retail media network? While it is true that retail media provides an important additional revenue stream, the cost of setting this up in the first place could be prohibitive. This is primarily because some retail media platforms are typically tech-heavy and require a lot of time, effort and resources to manage. While Amazon and Walmart have the money and expertise to build and manage their own platforms many small and midsize brands simply can’t. Thankfully, brands can now partner with retail media technology providers who already have the infrastructure perfected and marketers can plug in quickly and effectively to launch their own retail media network.
4) Keep pricing dynamic
Pricing ads is difficult; in fact, finding the optimal price for both sides is virtually impossible. The issue is that prices need to be competitive so brands get value for money, while publishers and retailers want to boost their profit margins. What makes retail media platforms so attractive is that they use machine learning to assess within a fraction of a second all of the factors that influence prices, and adjust accordingly for price optimisation. This is a critical point to consider because in the case of brands, you can rely heavily on the technology to help you get the best price possible, and boost revenue while saving you time. Conversely, if you want to set up your own retail media marketplace, ad space can then be efficiently and effectively allocated to advertisers through an auction-based system.
5) Take advantage of real-time reporting
Data is vital to the success of retail media. As a marketer, you want to track and see reporting of your campaigns to assess their ROAS and click-through rates [CTRs], while if you’ve taken the plunge and set up your own retail media platform you want to analyse the performance of individual brands, products and campaigns. Real-time reporting ensures transparency and ease of data extraction for all players in this equation. Why does this matter so much? With the long-relied-upon third-party cookies finally being phased out, retail media now offers the best way to access the gold dust that is first party data.