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Retail Media A Game-Changing Solution for Performance Marketers
Hey, there Performance Marketeers,
Welcome to our reach4growth newsletter, where we provide you with everything you need to know about performance marketing.
We know that performance marketers are always looking for actionable insights and innovative solutions to achieve their targets. That's why we're thrilled to share with you the exciting development of retail media networks.
According to research by commerce media company Criteo, the scale of demand retailers are experiencing for advertising slots on their websites is on the rise, with 96% forced to implement a waiting list. Retail media networks, such as Dunnhumby, Boots Media Group, Walmart Connect, and Carrefour Links, have existed in the market for a while now.
But now, most major retailers are looking to open a media arm, with Morrisons and Asos recently joining the game.
So, how do retail media networks work?
They use purchase data from retailer's loyalty accounts and then segment audiences into groups, such as customers who regularly buy vegan products or crisps. This allows them to target ads at those customers that are most likely to be interested and purchase the product.
Retailers have access to the data and inventory, meaning they can directly control everything about their media channels - from what products are advertised to which customers see those ads.
In addition, retailers benefit from this offering by increasing sales of their own products as well as those of their suppliers. This is done by leveraging the data and targeting ads to customers who are more likely to buy or upsell into higher-end products that carry a greater margin.
For example, a retailer with a loyalty program might be able to target customers with ads for higher-end items such as premium coffee machines.
What's driving growth in the retail media space?
These retail media buys are being positioned as privacy-first solutions to cookie deprecation.
The economic downturn is also playing a role as marketing budgets get squeezed. It's becoming increasingly essential for CMOs to eliminate wastage, and this service guarantees to reach viewers with a propensity to buy.
One of the biggest attractions of retail media is measuring performance. Since both ad placements and product sales take place on the same platform, it offers advertisers a unique 'closed loop' of insights: real data-backed advertising that can be accurately linked to sales. Therefore, it allows advertisers to track the impact and ROI of their ads and optimize their strategies more accurately.
Finally, it's worth noting that retail media gives advertisers greater control over their campaigns. Rather than relying on the opaque algorithms of online advertising networks, they can proactively choose where and when to place ads within a store environment. This makes it easier to reach the right audience at the right time with content tailored specifically for them.
But why should brands invest in retail media?
Reasonable cost of media, access to audiences otherwise not reachable, best performance delivery, unique shopper insight, the scale of audience, and omnichannel measurement.
Are you curious about combining retail media with TV?
In the UK and the US, retail media networks have teamed up with local broadcasters and streamers, including Walmart Connect's deal with Paramount+ and ITV, and Channel's partnerships with Dunnhumby and Sainsbury's Nectar network. In the case of Channel 4, it matched its 24 million All 4 users to Nectar's six million members and carved out 80 audience segments.
Post-campaign, broadcasters and retailers provide proof of who went on to buy the product after being exposed to the ad, a process termed closed-loop analytics. Broadcasters then match IP addresses from video-on-demand registrations and match them with the emails collected by the loyalty accounts to serve targeted ads.
I hope you found this newsletter engaging and informative. If you have any comments or questions, feel free to reach out to me.