Retail media has seen a surge in attention this past year as more brands and agencies realise the power of this medium. And it's no wonder. If used well, it can drive awareness, engagement, and conversions. In other words, it promises to be a potential gold mine.
On the flip side, this sudden rise in popularity is causing much anxiety and uncertainty for those brands and agencies that are feeling the pressure to invest, and to do so fast. So how can they take the first step – and how do they measure if it was the right one?
Taking the plunge into retail media: know where you want to go
First things first. As with any large-scale task, start by zooming out and thinking about what you are trying to achieve. To unlock retail media’s full potential, it needs to be thoughtfully embedded in the wider media mix and omnichannel strategy. Which role do you want retail media to play? Which targets to achieve?
Think lower funnel to start with – targeting and converting those who are already showing an interest in making a purchase. This is where retail media’s main appeal lies, at least for now. There is much excitement about its potential to build brand awareness and consideration, but the key strength of first-party data is in precise targeting – which can be costly but promises better conversion. Gain experience and proof of impact here first, then venture into other parts of the funnel next.
Focus your efforts – and consider retailer maturity
It is key to resist the urge to spread your investments too broadly and tap into as many retailer audiences as possible.
Not only is a reasonable investment needed to assess what is working., there is also quite a bit of effort involved in dealing with each retailer separately. Not to mention the fact that many retailer offerings are only just evolving, meaning an assessment may be premature – if there is even the necessary data available.
Rather than expecting immediate large wins, brands and agencies need to recognise that this area is maturing, and therefore needs realistic expectations, collaboration and experimentation. As retailers build up their inventory and expertise, advertisers are testing out what works for their specific brand – ideally in close cooperation.
If you are getting started, we would recommend going for a solid, measurable and well-planned investment with a bigger retailer first. Those already established within retail media can provide a more mature retail media offering, better data for optimisation, and a much lower effort experience. There may be some comparatively higher costs, as demand for market leaders grows faster than supply, but this should even out again as the number of capable players in the market increases.
It’s a journey: Keep observing, measuring, and experimenting
Particularly for any new channels, measuring what is and isn’t working will be vital for scaling up investments effectively and efficiently. From the beginning, make sure you have a clear measurement strategy in place – based on the KPIs and goals you want to achieve.
Why set measurement up early? Especially for a new retail data partner, you will want to make sure they have the capacity and capability to provide data for measurement. Plus, your investments and experiments should ideally be set up in a way that is suitable for solid measurement. If there is no variation in your activities or if spending is simply too small, it can be difficult to properly prove any impact.
Suitable retail media data is only the first step. To arrive at a true assessment, make sure your retail media activities are not measured in isolation. Research shows that using siloed data could be a significant lost opportunity – for every $1 spent, 35 cents can be lost. Instead, ensure you assess and optimise retail media as part of the full marketing mix and within your omnichannel strategy.
This will avoid overestimating the impact retail media had in driving sales on the retailer's own assets – and show you the true incremental sales generated. At the same time, it will capture the impact driven on other retailer websites and brick-and-mortar stores. For example, we know that 45% of sales driven by an Amazon Display Ad happen off Amazon.
Keep evolving your retail media strategy
Once your initial retail media and measurement strategy is in place – observe and evolve. Keep a close eye on signs of oversaturation, which could annoy shoppers and impact effectiveness over time. Stay on top of new offers, formats and capabilities emerging – such as offsite ad placements via retail media networks, and the yet unknown potential of generative AI.
This is an exciting moment for retail media and while the medium develops, brands and retailers should be clear on their goals, take on a mindset of collaboration and experimentation, and observe and optimise as we see retail media unfold to its full potential.