NDA, in partnership with Xandr, is collecting the views of some of our industry’s leading figures for their predictions on 2022 and beyond. Next up is Thomas Jones, Senior Manager, Solutions Engineering at Xandr.
Less than three months into 2022 and a new buzz phrase has already monopolised
conversations within the programmatic ecosystem: retail media.
Retailers are sitting on a treasure trove of first-party audience data, something many brands
are eager to gain access to. As a result, a growing number of retailers are developing new,
high-margin revenue streams via ‘retail media’ platforms, opening up their existing digital
platforms to external brand advertisers.
At a time when retail profit margins are being continually squeezed by intense competition
and pressures on consumer spending, those operating retail media networks are finding that
increased collaboration with brands and suppliers is delivering mutually beneficial outcomes
without the need for dedicated data scientists or the inhouse ability to code.
Creating a successful retail media platform
For retailers starting out on the journey of creating a ‘retail media’ platform, establishing
their identity strategy is key, i.e. the ability to identify customers and grow their data set.
This could be CRM platforms, loyalty cards or payment data. Having a clearly defined
strategy will attract brands to work with your platform.
The next step is to select a technology platform. Deciding whether to invest in building a
custom ad-tech platform or seek out a trusted partner can be a difficult decision to make. A
range of cloud-based solutions are available today, but often with limited capability to adapt
further to the planning and activation requirements of buyers beyond your owned and
operated inventory across channels and screens.
It’s important to consider the buyers’ needs too. Increasingly they want to trade media
programmatically, it improves efficiency among other benefits, and so, for retail media
networks it’s critical to ensure that transactions with buyers are frictionless.
Selecting a partner that can facilitate this and is well connected with the wider ad-tech
ecosystem of ad-servers and DSPs is essential in enabling retail media networks to access
the widest range of demand possible.
What’s in it for brands?
Advertising on retailers’ digital platforms is an attractive proposition for many brands, as they
increasingly seek future-proofed media planning, activation and measurement in a
‘cookieless’ online advertising environment.
A successful retail media platform is underpinned by first-party relationships with consumers.
Authenticated consumers are a highly valuable asset as marketers seek differentiated,
consented datasets to reach high intent shoppers. This creates new opportunities for brands
who don’t have access to their own first-party data set. FMCG brands for example, are
facing pressure and disruption from digitally native direct-to-consumer competitors and need
to take advantage of retailer consumer first-party connections. Timely, relevant messaging
can be integrated natively into the customer journey through onsite search and product
category pages and/or served to in-store digital signage.
Retail media presents a win-win for both brands and retailers. The beauty of the retail media
model is that it enables targeted transactions and closed loop attribution without the use of
third-party cookies. The ability to measure impact by attributing campaigns directly to a
transaction provides brand, campaign or creative level insights that can be shared with
brand partners for better optimisation of their budgets.
Retail is just the beginning
The next evolution in retail media marketing will require retailers to offer scale and targeting
beyond their owned and operated channels. In addition to a strong onsite element of the
proposition, brands are consistently seeking high value and under-exposed customers
across channels and screens. Retail media networks should be building the capabilities to
activate shopper data across fast growing channels such as Connected TV in order to
reach shoppers wherever they consume media.
Going forward, it isn’t just retailers who can see the benefit in creating these new platforms.
We can expect to see other industry sectors such as travel, pharmaceutical and financial
services create media- based business models of their own. The tools exist today to allow
retailers and the like, to retain control over their first-party data asset and monetize it on their
own terms across different channels and formats, on any DSP. The trick is to think beyond
their owned and operated (on-site) inventory in order to differentiate their platforms and
secure their future growth.