With a holistic view of the market, retailers can deliver distinctive offerings to CPG advertisers and lasso more sales
By Alan Miles, Chief Executive Officer, NCS
It’s boom time for retail media networks. An increasing number of retailers are offering space on their e-commerce, search, social media, and display channels to advertisers. It’s a significant digital opportunity both for retailers, who are able to add a new revenue stream and for CPG brands, who gain access to valuable first-party data.
The proof is in the wide variety and rate of retailers setting up their own retail media networks. Retailers of all stripes, from small craft stores such as Michaels to supermarkets such as Kroger, are finding they can earn substantial advertising revenue by selling ad space on their online storefronts. A new network is launched every month.
And yet, it’s still a bit of a wild West, as retailers and brands gallop down the path to embracing media networks.
A Mirror Image of the Digital Publishing Boom
The rise of retail media networks is reminiscent of the digital publishing boom of the 2010s. Billions of dollars were invested in creating new digital media properties and helping legacy media outlets build their online presence.
Consumers shifted to digital and mobile platforms in droves, brands built their digital advertising and data departments, and ad tech companies developed ad networks and audience-building technologies to accommodate the massive influx of digital ad buyers and sellers.
Today, digital media is now a key component of every marketing campaign. As retail media networks continue to grow, we expect them to become a marketing mainstay as well.
Still, the early days of digital publishing had its own share of busts. There’s a similar risk for retail media networks. If their offerings aren’t relevant to advertisers or aligned with their needs, they won’t survive the boom.
If we look at the publishers who fared the best during the digital publication boom, they were the ones who differentiated themselves from the crowd, built distinctive brands, and forged lasting relationships with their advertiser clients.
That’s the key lesson we can draw from the comparison: The most successful retail media networks will be the ones that create similarly distinct retail advertising businesses — ones that are unique and provide value advertisers can’t find anywhere else.
A Distinctive Edge: Third-Party Measurement
By 2026, the U.S. retail media market is expected to reach more than $100 billion. Almost 75% of CPG marketers said they planned to invest more of their media budget in retail media networks, according to findings from a 2022 Brand Innovators and NCSolutions CPG Marketers survey.
Retailers can carve out a spot in this high-margin business and differentiate themselves to help brands.
Embrace holistic measurement. You have a great deal of first-party data on what your customers are buying in your stores, but advertisers need to understand what’s happening across the whole shopping universe. Offering the ability to measure the sales impact of campaigns both in your stores and at other retailers will help you demonstrate the total value of your network to advertisers.
Create bespoke and distinct data offerings. Bringing in third-party data opens a range of possibilities and will allow you to offer unique value. With a more holistic view of consumer purchase behavior, you can help your advertisers find buyers outside of your network and design more effective campaigns.
Partner with leaders. Today’s retail media networks have a built-in advantage to the pioneers of the digital publishing boom: Access to third-party measurement experts who’ve been at this rodeo before and understand how media businesses are built. The right partner can help you focus on the right opportunities, build unique offerings and provide additional value to brands.
Taken together, these steps will help retail media networks align their interests with those of their advertisers. With a holistic view of the market and distinctive offerings, retail media networks can expand their shopper base and identify new audiences and opportunities for brands. This approach will also enable them to be more agile, adapt more quickly to market changes and innovate new offerings.
Retail media networks don’t have to become full-blown publishing enterprises to stand out in this crowded field. But they can lead the industry as they create unique value and unmatched opportunities for brands.
Learn more about how you can prove the value of your CPG campaigns.