Retail media networks are rapidly becoming the norm for organizations of all sizes, as even small retailers are realizing opportunities. Further, with data from a BCG and Google study showing that early adopters will likely eventually control the retail media market, early adoption is better.
Retail media networks are used to allow brands to buy ad space across your onsite and offsite properties. While retail media has traditionally been an eCommerce channel, it’s gaining traction and relevance to omnichannel as our ability to use programmatic to advertise hyperlocal points of sale grows.
With the combination of high buyer intent on these sites as well as your ability to use existing consumer data, brands are increasingly interested in buying those ads. As a result, the industry is growing rapidly, and so much so that each Amazon and Walmart reported results for their advertising in 2021.
In one survey, the BCG interviewed 50+ retail media leaders to assess the market and growth. That survey predicts the retail market will grow by 25%+ per year. In addition, with other industries such as travel and automotive expected to move in as well, that could reach 35% growth per year.
Most importantly, the largest companies are using retail media ad strategies to invest in their businesses by lowering prices, updating in-store technology, and improving marketing.
Offsite and Near-Site Retail Media are Growing
The largest organizations can easily leverage their own channels, but small and midsize players are increasingly using offsite channels for retail media. Here, offsite offers significant advantages, because it functions to expand the organizations’ reach, typically funnels ads back to your own website and products, and therefore, uses retail media to fund your own advertising. However, both onsite and offsite are important.
The BCG study estimates that the U.S. market for offsite retail media ads alone will reach $75 billion in profit by 2026, with profit margins in the range of 20-40% after media costs and agency and management fees. With a profit margin comparable to that of onsite ads, BCG and Google predict that 30% of all retail media spend will be offsite within 5 years.
Retail Media offers Numerous Advantages
Retail media ads offer increased control to brands paying for ads. That’s especially true over traditional off-site ads, such as trade spending, sponsorships, events, and promotions. This increased control means brands can better monitor performance, better understand ROI, and better adjust spending allocation per channel, location, and ad unit. That’s especially true with increasing growth in digital advertising – including the shift of many traditional local advertising sources to digital.
· Retailers already have consumer databases and ongoing relationships enabling personalized advertising and a seamless consumer experience
· Retailers leverage their own databases for targeting, creating higher returns for advertisers without higher investment for offsite ads
· Buyer intent is very high on and in retailer spaces meaning ROI is very high, which further increases advertiser interest
Retail media also stands out in the digital space, because it gives advertisers a much-needed first-party audience, avoiding customer privacy issues. And, while big players currently dominate (Amazon owns an estimated 60% of the market), smaller retailers are quickly profiting from the space as well. Further, experts suggest that failing to integrate into the space will mean losing out to a competitor who does, putting some urgency on adoption.
A Plug and Play Offsite Retail Media Solution
Adcombi’s hyperlocal advertising platform fits neatly into that retail media space, enabling you to use the programmatic ecosystem to advertise stationary stores and point of sale – offering a seamless way to integrate drive-to-store and near-site ads in a geotargeted way.
In addition to enabling programmatic for brick-and-mortar stores, Adcombi facilitates handling micro-budgeted local campaigns. For example, each location can be set up with its own line on the DSP and therefore its own budget. Advertisers can then apply local advertising pressure in a targeted way, based on data, and optimized over time based on results like foot traffic, coupon usage, etc.
Finally, with each location using its own line on the DSP, Adcombi allows for near-infinite ad customization, with route planners, custom promotions, and local pricing per promoted product. That local information creates higher relevance while driving the potential consumer directly to the point of sale – effectively acting as an extension of the retail media network.
Retail media is rapidly growing. That’s backed by major advertising players like Google, which expect to see the industry grow by nearly 30% per year. Adcombi’s plug and play solution is the ideal way to get started and it’s already been used by major brands like Albert Heijn, Plus, Gamma, Edeka, Gamma, and others.
If you’d like to learn more about how Adcombi fills the near-site and off-site gap in retail media, or how we can help you, contact us to schedule a chat – we're happy to help.
References: https://www.bcg.com/publications/2022/how-media-is-shaping-retail
