Digital media experts expect a slight ad spend slowdown heading into next year, but a DoubleVerify survey predicts that retail media networks will grow significantly in 2024.
While GroupM and others are forecasting a modest slowdown in advertising spending next year, one channel will see a sizable bump: retail media.
According to a DoubleVerify survey of 400 US, UK, French, and German marketers, retail media networks are an attractive, privacy-friendly way to reach new customers and engage consumers as they shop.
US marketers have been quick to embrace that channel, with 87% of them saying they already invest in retail media and 83% planning to increase spending over the next 12 months. Not surprisingly, the big retailers Amazon, eBay, and Walmart are the predominant RMNs of choice for survey respondents.
Compelling Benefits of Retail Media
Retail media offers compelling benefits to marketers, especially as the deprecation of third-party cookies looms. Brand marketers like the channel’s ability to put them in front of the right audience, and 37% cited targeting people by demographic and product interest as the biggest benefit of RMN. 32% of agencies say the biggest advantage is raising brand awareness.
Regarding campaign objectives, nearly half (45%) of brand marketers prioritize attracting first-time customers as their primary goal for retail media campaigns, with another 40% aiming to target customers likely to be interested in their products.
Thirty-seven percent said they want to reach consumers at the point of purchase, which is surprising as brands often touted this as a critical benefit of retail media.
When evaluating RMN effectiveness, 50% of brand marketers say a campaign is successful if it leads to more in-store or online sales, whereas 43% of agency respondents prioritize impressions and reach.
Strong Results Justify Premium Costs
Nearly half (48%) say retail media CPMs are higher than other channels, but campaign results justify the expenses. When asked about retail media’s return on ad spend (ROAS), 61% of buyers said that RMNs perform better than other channels.
Challenges Marketers Face
As much as marketers like the ROAS retail media and appreciate its ability to help them build their new customer base, it’s not without its challenges. Trust and transparency are vital concerns, as marketers want assurance that the right consumers saw their ads at the right time. Unsurprisingly, 91% of retail media buyers report working with an ad verification partner today. Additionally, 89% of those polled in the US said “ensuring ad quality within retail media networks is important.”
While most marketers are spending on retail media currently and plan to invest more over the next 12 months, they’re still concerned with limited targeting options, constrained on-site ad space, high CPMs, and the absence of third-party ad quality verification.
“Retail media offers a substantial opportunity for marketers to connect with customers during their shopping journey. However, like all emerging channels, the importance of trust and transparency cannot be overstated. Third-party verification is crucial for cultivating this trust. We see a rapid expansion of Retail Media Networks in the market, and those that provide independent measurement will have a distinct advantage.” – Andrew Smith, SVP, Product, Publisher.