What Are Retail Media Networks?
As online retails plays an increasingly large role in commerce, traditional online publishers and brands have found new ways to develop paid media opportunities across their digital properties. Retail media networks (RMNs) are “velvet rope” paid programmatic advertising networks owned and operated by retailers rather than the more general access and self-service offered by ad platforms such as Google’s Display Network.
RMNs allow marketers to reach customers on valuable domains and apps – with a few drawbacks.
RMN on the Rise
Retail media networks are the fastest-growing segment of paid search. Paid search advertising is expected to grow at 8.2% in 2023, outpacing all spending by 7.8%. Within that category, RMNs will account for approximately $30 billion, an 18.7% increase over 2022 figures.
So, what’s driving the growth? With digital marketing spend growth slowing, RMNs’ ability to provide accurate, real-time demographics and engagement data is a game-changer.
How Do Retail Media Networks Work?
Think of RMNs as in-store ads on the internet. If you’re shopping in person at your local Best Buy, you’ll probably notice ample brand and product-focused marketing dotting the store, from endcap displays to demos to brand-specific sections of the sales floor.
Online, retailers engage in similar tactics to place relevant programmatic ads across their various websites and apps. In some cases, the retailer may partner with other stores or websites to serve ads across additional digital properties to expand their reach.
Advertisers can also place ads near top-ranking competitors to build brand recognition over time. This is a common tactic in paid media already, but it can be even more important when the ad is placed on a marketplace – the user can change their mind in the moment and convert in just a click or two!
Why Retail Media Advertising Is a Smart Move
With third-party cookies crumbling, advertisers are looking for more ways to target the right customers on the right platforms. One solution is buying specific ad placements on the homepage, product page, search results page or in a retailer’s app. Retailers have access to first-party data, or data on specific customer behaviors, that they can leverage to make programmatic ads more effective.
Well-Known Examples of Retail Media Networks
The largest online retailers have invested heavily in building and growing their networks. Companies like Walmart and Amazon can provide access to millions of qualified customers per day supported by many of the same ad targeting tools you’d find in Google AdWords.
The biggest retail media networks are household names; you’ve probably visited at least one of their sites in the last week:
- Home Depot
- Best Buy
- Dollar Tree
The hefty investment these brands have made in first party data and access to it through programmatic advertising has proven lucrative. Digital ad sales have become a crucial revenue stream for many of these brands, which provides an additional source of profit and a degree of insulation and stability when consumer habits change.
Amazon generated $37.7 billion in ad-related revenue in 2022, a 21% increase over 2021 and roughly 10% of the world’s total digital ad spend. Amazon is an online store and an ad publisher – and certainly a whole lot more.
It is invested in a diversified toolbox for showing ads, including:
- Streaming TV ads
- Audio ads
- Sponsored display
- Sponsored brands and products (search ads)
- Amazon DSP (Demand-side platform)
Where Retail Media Ads Are Served
If you’re evaluating retail media networks, chat with our paid media experts. We’ll help you develop a strategy that aligns with your budget, product, audience and your efforts on other digital marketing channels, too.
Advertising on RMNs includes many of the same paid targeting decisions you may be familiar with but with a twist: Another key choice is deciding where ads are placed and aligning creative imagery and ad copy to match. The type of pages where RMN ads can be placed often reflect different stages of the customer journey. And these types of pages often provide information the user is in search of, based on the page, and this can inform the advertiser as to which ad message will likely be most compelling.
Three common page types are:
The homepage – Ads on a retailer’s homepage aren’t cheap, but think of the reach – Walmart.com sees 384 million visits per day, and that is during its slow season. Creating compelling content and using a strong call to action (CTA) is crucial for making this substantial investment a smart play.
The category page – Hop on Amazon and search for any non-branded term – you’ll hit the category page. This provides a more focused audience that still has a few decisions to make – what brand do I want? How many do I need? What’s a good price? It’s a different step in the customer journey and a tailored ad variation will help move customers toward conversion.
The product page – Users on a product page are close to converting. We recommend placing ads on a competitor’s product page that could lure them toward yours, especially on products with a short sales cycle. You might also run ads on your own product page to upsell. Why not pair that new laptop with a case, mouse or both?
Play the Whole Retail Media Network Game – and Win
There’s no perfect platform for everyone. That’s why our paid marketing specialists constantly test, evaluate and adjust to maximize return on ad spend and identify opportunities ahead. Backed by a vertically integrated team of designers, developers and strategists, we’ll create the right marketing mix for your brand. Get in touch or call 231-922-9977 today to get the ball rolling!