What Are Retail Media Networks and Why Should Developers Care?

More often, brands are advertising on retail media networks to raise brand awareness, move advertising messaging closer to the point of decision, and grow their revenues.

Why Retail Media Networks?

Choosing where to advertise can make or break a campaign. Traditionally, brands evaluated entertainment, editorial, and news and other media outlets for advertising. Businesses would identify magazines, television programs, and news outlets whose audiences matched their own. They’d also balance the media outlet’s reputation and editorial authority against the cost of advertising there, looking for the best return for their investment.

However, with the rampant popularity of e-commerce, some retailers capture more views than any television program. For example, in fiscal 2023, ESPN digital had an impressive average of 111 million unique visitors each month. But as of March 2023, Amazon had 2.4 billion visitors per month.

So, as retailers claimed digital real estate and built an audience, they realized they could monetize some of that space by allowing brands to advertise there. These “retail media networks” give brands expanded options for where to get their messaging in front of their audiences and do it more effectively.

Examples of retail media networks include Walmart Connect, a closed-loop system that provides a comprehensive view of Walmart customer behaviors in-store and online and delivers measurable results for the advertiser. Another is Target Roundel, which allows advertisers to use its data to create targeted, personalized campaigns.

And Look for Even More Opportunities to Advertise on Retail Sites

The 2023 Retail TouchPoints Omnichannel and Fulfillment Benchmark Survey found that 51 percent of the retailers participating in the study had added retail media networks to their offerings in 2023.

Furthermore, Insider Intelligence predicts that retail media will be the fastest growing ad channel through 2027, growing by more than 20 percent each year. Also that year, retail media will tie with social media at the second biggest ad spending channel, and it will eclipse connected TV, digital audio, traditional television combined.

The Challenges Retailers Face with Retail Media Networks

A Clearcode blog points out that although the concept is relatively simple – put a brand’s ads on a partner’s digital assets using data to target the right consumers – retailers need expertise to do it. First, marketers need a way to manage media purchases on different networks, which can be time-consuming without the right tools.  Additionally, developing an AdTech platform takes expertise that many retailers don’t have.

Clearcode also points out that although retail media networks are quickly rising in popularity, best practices and standard metrics aren’t universally accepted, which can make comparing campaign performance across different networks difficult.

Retailers who want to establish a retail media network may also need help to monetize their first-party data to create a valuable offering for potential advertisers. They also need to allow advertisers to integrate with their networks to share inventory data. The last thing an advertiser would want to do is promote a product that’s out of stock and risk alienating a consumer. Sharing inventory data can enable automatically suppressing ads for out of stock items and promoting the merchandise the advertiser has for sale at that moment.

Is AdTech Your Niche?

ISVs focused on the AdTech space have the opportunity to support retail media networks and the advertisers who want to take advantage of them. Is your team ready to meet demand?