Publishers and advertisers understand the value of Retail Media Networks, such as their robust first-party data sets, but the industry must address certain challenges so RMNs can reach their full potential.
Retail media networks have been a saving grace with the industry facing many uncertainties like a potential ad recession and privacy constraints hindering revenue.
Emarketer reported that retail media ad spend in the U.S. will reach $45.15 billion by the end of this year. That is an almost 20% increase from last year. Over the next four years, industry experts expect RMN ad spend to reach $106.12 billion, accounting for a quarter of U.S. ad spend.
Like any new technology, when retail media networks became the new fashionable ad tech trend, publishers and advertisers hesitated to test them. Years later, no one can deny their value within the ecosystem, and everyone is working overtime to get a piece of the e-commerce pie.
LiveIntent’s new study surveyed over 200 U.S. marketers to analyze their experiences with retail media networks in hopes of improving the already successful medium.
Adoption and Performance: Do Publishers and Advertisers Understand RMNs?
According to the data, retail media is on the brink of a significant growth phase. Mike Pisula, VP of Product Development at LiveIntent, said, “Retail media is booming because retailers have first-party email data, logged-in users on web and app, and offer closed-loop measurement.”
But how are brands adopting and performing with RMNs?
LivenIntent’s study suggests that most marketers understand RMNs to some extent. About 60% surveyed have a general understanding of RMNs, while 40% have a detailed understanding of the medium. Ninety percent surveyed also believe they will significantly increase over the next few years.
Essentially, publishers and advertisers recognize the value and potential of retail media networks. Many marketers in the survey ranked RMNs effectiveness over other digital media channels. Sixty-three percent believe retail media advertising was more effective than other forms of digital advertising, and fifty-four percent saw significant improvement in sales or customer engagement due to retail media advertising.
Potential Value and Challenges: First-Party Data Assets Ring True, but Inventory Is Limited
Retail Media Networks offer many opportunities, but marketers confess to some much-needed improvements. For instance, marketers seek diverse and innovative ways to reach their audience. Mike Pisula said, “Marketers have clearly expressed that retail media inventory is too limited, especially given the high performance of retail media.”
How to Address Marketers’ Needs:
- Sixty-one percent of advertisers want logged-in inventory, like email newsletters and alerts, video/streaming, or social media.
- Sixty-four percent want more video, 57% want connected TV/streaming, 56% want off-site media, and 54% want email-based newsletters, alerts, and receipts from RMNs.
- Ninety-six percent of respondents agreed that retailers should monetize their inventory through advertising.
In addition, advertisers mentioned difficulty measuring campaign effectiveness, and about 52% called out a need for more awareness among brands and retailers.
The industry must acknowledge these challenges to harness the power of RMNs fully.
On the other hand, since Google announced Chrome’s third-party cookie deprecation, many brands flocked to RMNs because of their wealth of first-party data assets. Most marketers surveyed, about 96%, consider first-party data crucial to their overall data strategy, and about 73% said that the incoming cookiepocalypse was their main driving force towards RMNs.
The Power of Logged-In Media Channels
Logged-in environments like social media and email are crucial for a brand’s success. Jason Kleinman, VP of Enterprise Sales at LiveIntent, noted, “Retailers who can lean into their existing logged-in media channels or explore new ones are sitting on the precipice of rocketship growth.”
The marketers in the survey agree. A majority of the respondents consider logged-in environments essential to RMN’s success. Fifty-two percent of respondents anticipated a slight increase in dollars to retailers’ logged-in media, and seventy-four percent of respondents plan to invest more in retailers’ logged-in media channels than last year.
Retail Media’s exponential growth is evident, but if retailers and brands want to reach their full potential, they must address these challenges and nurture their successes. RMNs can only reach their full potential if their effectiveness drives them, develops the potential of logged-in environments, and utilizes their wealth of first-party data assets.