Retailer considerations for building a retail media network
First off let’s start with the good news. Brands and advertisers are waking up to the value of retail audiences. Retail media networks are seen as the 3rd wave of digital advertising (1st wave was search, 2nd was social) due to the ability to deliver closed loop marketing campaigns to walled garden audiences. Retail media spend is estimated to grow faster than digital media spend in the next few years, at least.
According to McKinsey & Company, retailers that invest in retail media networks are attracting net new spend and budget reallocation from existing advertiser spend – Brands are investing an incremental 80% above and beyond traditional trade marketing budgets.
Building a proprietary retail media network will depend on a variety of factors such as the resources and expertise available to the retailer, the demand for advertising within the retailer's online / physical storefront, and the potential return on investment.
Most retailers already work with their existing suppliers to generate revenue through online and in store campaigns. Typical campaigns include a rate card for banner ads, MPU ads, email, social media, in store media.
To move beyond and attract additional investment from their existing suppliers a retailer would need to invest in an AdTech platform that can manage multiple advertisers and campaigns, display ads programmatically, track metrics and provide data insights to brands and advertisers in order to demonstrate the effectiveness of the retail media campaigns.
Depending on the size, complexity and ambition of their retail media network, the retailer may also need to hire additional staff to manage the network, including account managers to work with brands and advertisers, data analysts to deliver actionable insights, technical staff to maintain and support the platform. They may also need to invest in sales and marketing resources to attract brands and advertisers.
There won’t be a one size fits all solution. There is a lot of innovation in the space with managed service AdTech players emerging to work with retailers in various ways – fully managed services whereby the AdTech partner provides the platform and can even manage brand / advertiser relationships as well as bringing new relevant brands and advertisers to the table, co-managed which is a hybrid, retailer manages their own supplier partners on a self service platform and adds external advertisers on an a la carte basis.
In conclusion, retail media networks are the next big wave in digital advertising, and retailers that invest in their retail media network can grow a new profitable revenue stream that can be reinvested into their core retail business. With a range of options available from build it yourself to co-managed solutions, retailers should carefully consider their goals and resources before deciding on how to build their network or take a phased approach from managed / co-managed solution to proprietary.
Zenbundle are building a unique retail media AdTech platform that embeds third party ads and offers into highly relevant shopper journeys.