Retail media networks: A data goldmine for programmatic companies?

In a world soon to be rid of third-party cookies, retail media networks have been a boon for multiple programmatic companies, which is expected to grow further and turn into a goldmine for the digital advertising world.

Retail media networks have sprung into the scene as more people figured out the online shopping experience in the pandemic chaos of 2020. Retail media network is when businesses advertise on retailer’s online media networks, giving them access to the first-party data of the retailer to target their specified audience.

According to GroupM’s TYNY report 2023, retail media is the third-fastest growing advertising channel in 2023. It is set to grow 9.9% to reach $125.7 billion in 2023, the report said.

Brands have an increasing need to understand, drive and measure digital interactions effectively, or else they risk losing in-market customers, says Ashish Sinha, MD - APAC ME, Epsilon. “Retail media networks give brands the ability to tap into a retailer’s first-party data and scale their marketing efforts to increase sales on-site and in-store. Specifically, brands have an opportunity to reach shoppers at various stages of the buyer journey. For instance, a large enough retailer can effectively deploy messages from brands on the ‘Home Page’ for awareness, ‘Category Page’ for consideration, or ‘Product Page’ for comparison or purchase decision. It’s a true win-win opportunity for smart retailers looking for a scaled, trusted revenue stream and brands who want to optimize activation for performance.”

Sharing views on a similar note, Rajiv Dingra, Founder & CEO, ReBid.co says that retail media networks are the new frontier for brands looking to reach consumers in a targeted, effective manner. “These platforms offer a unique blend of first-party data and customer intent, allowing brands to showcase their products to consumers who are already in a buying mindset. Amazon, for instance, has become the third-largest digital advertising company globally, leveraging its consumer data to grow brand awareness and drive in-store sales.”

exchange4media spoke to experts in the field to also understand how this new method of using first-party data will help programmatic companies in the coming days when third-party data gets slowly removed.

A lucrative opportunity

Retail media is the next step in programmatic, says Sinha. “It allows brands to move beyond their reliance on third-party cookies and gives them the ability to tap into better data and measurement as they work directly with retailers or other data-rich companies. It provides better outcomes for brands, experiences for shoppers and monetization opportunities for retailers.”

Dingra opines, “Retail media networks are a goldmine for programmatic advertising. They offer a level of personalization and targeting that's hard to match, thanks to their rich first-party data. This makes ads more seamless and valuable to potential customers. The retail ad sector is predicted to grow 31% to $41 billion this year globally, indicating a lucrative opportunity for brands to tap into."

Girish Ramachandra, CEO and founder, Shopalyst believes that the availability of retail media inventory for programmatic buying will make it easy for brands to run multi-touch campaigns more effectively. “Easier access and greater transparency can make retail media an always-on component of the media mix for advertisers” he adds.

How are digital advertising companies using retail media networks?

Epsilon has a comprehensive retail media network offering with the CitrusAd platform sitting at its center. They provide retailers and brands with offerings for on-site, off-site and in-store activation.

“Full funnel, integrated approach means that retailers using the CitrusAd platform can provide brands with a holistic view of SKU-level campaign performance. Our ability to accurately reach consumers off-site is a key advantage of our retail media offering. Our research shows that only 37% of retailers are using off-site retail media as part of their monetization, meaning they are leaving money on the table. When a retail media network can reach in-market prospects beyond the retailer’s website—across display, mobile, video, CTV and more— they are able to drive more online and in-store SKU sales than on-site alone. And all this while achieving meaningful personalization through relevant customer journeys, while ensuring the highest norms of privacy compliance.” says Sinha.

Dingra explains how Rebid also uses retail media networks to grow business. “We're already a verified partner with Amazon ads and are looking to integrate more retail media partners into ReBid. As we focus on maximizing advertising outcomes through our Advertisers CDP and Advertising Data Platform, a retail media solution is definitely a key part of our roadmap. We recognize the immense value it can bring to our clients in Retail/Omnichannel, BFSI, D2C, Automobiles, and Travel & Hospitality Industries.”

Shopalyst also offers a solution for brands to leverage retail media. “Our ad builder has integrations with popular Retail media platforms as well as DSPs. We also offer a toolkit for collaborative advertising.”

These are just a few examples in the large space of retail media advertising, which is expected to grow further in the coming years. If we go by Group M’s predictions, by 2028, retail media will account for 15.4% of total advertising revenue and is forecast to exceed TV revenue (including CTV).