Retail Media Networks: Love them or hate them, how to use them

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Retail Media Networks: Love them or hate them, how to use them

In the fast-paced and evolving landscape of advertising, Retail Media Networks (RMNs) have emerged as a beacon of innovation and efficiency, fundamentally reshaping the way brands connect with their consumers. Dominated by behemoths such as Amazon Advertising, Best Buy, Walmart Connect, and Kroger Precision Marketing, RMNs offer access to consumer insights through first-party data, allowing for personalized targeting at a scale previously unimaginable. In 2022 alone, Amazon Advertising commanded a staggering 75% market share with ad revenue reaching $37.7 billion, underscoring the colossal impact of RMNs in the advertising ecosystem.

The allure of these advertising platforms are not lost on marketers, with a staggering 96% reporting achieved brand impacts through RMN programs. The appeal lies in the precision targeting enabled by consumer data, allowing brands to craft highly tailored messages that resonate on a personal level. This not only improves ecommerce conversion rates onsite but also fosters a deeper, more meaningful connection between brands and consumers.

However, despite the obvious advantages, there’s a palpable risk in becoming overly reliant on Retail Media Networks. The cost of retail media advertising, especially for premium placements, can be prohibitive for emerging brands, potentially sidelining them in favor of larger entities with deeper pockets. Moreover, the very nature of RMNs places brands at the mercy of their policies and algorithms, which are prone to unpredictable changes, posing a significant risk to marketing consistency and strategy effectiveness. While the effect of RMNs on brands is evident, with 87% intending to invest more budget in the tool, the cost of RMNs is also rising. Therefore, brands must keep up with inflating retail media ad spend costs to stay in the game and maintain a healthy ROAS (Return on Ad Spend).

Another aspect to consider is the extensive use of first-party data by RMNs , bringing forth privacy concerns. Consumers are becoming increasingly vigilant about how their information is used. This heightened sensitivity towards privacy can potentially lead to consumer backlash against brands perceived to be invasive with customer data. Additionally, the predominant focus on last-touch attribution by RMNs obscures the comprehensive view of the customer journey, leading to possible misattribution and overlooked opportunities for brand awareness and engagement outside the RMN’s ecosystem.

Considering these challenges, it becomes evident that a more balanced and diversified digital marketing and advertising strategy is not just beneficial but necessary. An overemphasis on RMNs can lead to a narrow interpretation of consumer behavior and diminish the potential to engage with audiences across various platforms, marketplaces and stages of the buying process. Brands must recognize RMNs as a component of a larger marketing mosaic, complementing rather than substituting the spectrum of available advertising channels.

Integrating RMN campaigns with digital channels such as social media (such as Instagram and Tiktok), search engine marketing (search ads in various formats, shopping feeds, etc), in-store promotions, display ads, and other digital advertising avenues offers a holistic approach to consumer engagement. Platforms like Shopkick, which bridge the online and offsite shopping experience, provide a valuable extension to RMN strategies. Shopkick’s unique model rewards consumers for both online and physical store interactions, complementing RMNs’ data-driven approach and filling crucial engagement and insight gaps. The Shopkick app allows you to leverage brand-owned content throughout the entire consumer journey, guiding an incremental audience from discovery to purchase. By supporting your RMN efforts with rich content, you can create a shopping experience that fosters connection, consideration, and conversion.

Shopkick and Retail Media Networks can work together to:

  • Help Brands Make Shopping Fun: Shopkick’s reward system boosts engagement online and in physical stores with a gamified experience that increases awareness and loyalty.
  • Create an Omni-channel Experience: Integrating Shopkick provides another brand-consistent touch point that reaches consumers when they’re in a shopping mindset, driving conversions.
  • Pre and Post Purchase Insights: The consumer journey begins with brand awareness. Brands can use Shopkick’s in-app scan data and awareness surveys to make smart choices about advertising before shopping. After a purchase, they can look at post-purchase surveys, detailed receipt data, and basket analyses, along with RMN insights and metrics, to understand customer satisfaction, chances of repurchase, and brand loyalty.
  • Increase Foot Traffic and Sales: Shopkick’s in-store rewards drive more physical store visits, enhancing RMN in-store ads, promotions and sales. 80% of shopping is still happening in-store, so this is a key collaboration point. Shopkick creates targeted campaigns that drive shoppers to a specific retailer to help with in-store point of purchase performance at brands desired retailers.
  • Cross-promote Opportunities: Mutual promotion between Shopkick and RMNs expands audience reach and maximizes marketing efforts.
  • Expand Brand Partnerships: Leveraging Shopkick’s brand partnerships attract more brands to Retail Media Networks, enhancing their value.
  • Enhance Consumer Journey Mapping: Shopkick’s ability to collect first party data along the entire consumer journey can help RMNs optimize content and advertising strategies across the entire path to purchase.
  • Enhance Targeting Features: Embracing collaboration between RMNs and other advertising avenues can enable brands to target specific demographics with greater precision and deliver a more varied and engaging consumer experience to their target audience.

While Retail Media Networks represent a significant leap forward in digital ad technology and strategy, brands must tread carefully to avoid becoming limited with an RMN-centric view. The complexities of consumer behavior and the multifaceted nature of the digital landscape across platforms and ad space can necessitate a more expansive and flexible approach to advertising. By using RMNs as part of a broader, diversified strategy and actively seeking synergies with other marketing channels, brands can maximize the benefits of RMNs while mitigating their limitations. In doing so, brands position themselves as innovative leaders capable of navigating the ever-changing world of retail. This balanced approach is not merely advantageous; it is indispensable.

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