Consumer demands for curated ads from trusted brands is prompting retailers to tap retail media opportunities and open up new revenue streams from monetising their first party audiences, according to the latest research from ADvendio, an omnichannel advertising solution provider.
Original research of over 1,000 UK shoppers by ADvendio showed the impact of customer engagement via traditional advertising was diminishing, with UK shoppers saying they ignore over half (56%) of digital advertising they see, while 54% of search ads also go unnoticed by UK consumers.
And this diminishing engagement is being caused by unpersonalised and poorly targeted advertisements and engagement strategies; 68% of shoppers say they often received ads from retailers and brands that are unpersonalised or irrelevant, and 74% report they regularly receive ads for products they aren’t interested in. A further seven in ten (68%) also said they frequently get served content digitally that’s not relevant to them.
Consumers are experiencing poor quality ad experiences with third party brands and are now wanting curated content and personalised ads served to them by the retailers they are already loyal to. Half (50%) of those polled said they would like to receive highly curated, personalised advertisements and brand communications from the retailers they already shop with, rising to 65% of Gen Z and 62% of Millennials. And, with two fifths (38%) saying they would be most likely to buy from a product recommendation they received from a retailer they already regularly shopped with, this is prompting retailers to adapt how they leverage and monetise their own first party data and audiences.
Commenting in ADvendio’s latest report ‘Where the Retail Media opportunities lie in 2023’, IGD’s Global Insight Leader, Toby Pickard, said: “This is a significant opportunity for retailers to enhance their collaboration with suppliers, unlocking new opportunities for revenue and profitability as they win over marketing spend from ‘traditional’ media like digital, out of home or broadcast. The ability to influence shoppers before they start shopping, when they get to the store or website and at the virtual or real shelf – or ‘prime, prompt, purchase’ as Tesco puts it – is a powerful one as it enables brands to focus marketing spend on particular groups such as current shoppers, lapsed shoppers, competitor shoppers or possible shoppers.”
Bernd Bube, Founder and CEO of ADvendio, commented: “Diminishing returns on traditional media ad spend, cookie depreciation and engagement levels on social media and PPC plateauing prompting lower ROI on what were previously lucrative channels is proving a perfect storm for retail media. Those retail businesses with strong data sets realise they have a great position to benefit from this digital marketing crossroads. Not just representing a sizable revenue opportunity, Retail Media Networks are changing the role of the retailer into media powerhouses, offering opportunities for advertisers and 3rd party brands to reach and influence highly-engaged and conversion-ready consumers.”