Retail media networks, or RMNs, are an ambitious new channel to reach the sizable audiences of some of the largest retail companies in the world. Developed alongside the meteoric rise of eCommerce over the past few years, RMNs allow online retailers to work with brands to activate against valuable first-party audience data and ad inventory. Though originally an Amazon creation, other top retailers like WalMart, Target and Best Buy have developed their own RMNs, and even more are following suit in the coming years.
It’s a brave new world for digital advertising, and there’s a lot of opportunity for advertisers and retailers alike. But, with new opportunities come new measurement challenges. Advertisers still want to ensure KPIs such as fraud, viewability, attention and brand safety can be measured and analyzed similar to more traditional settings. Understanding the best approach to this is the first step toward providing the transparency and controls that advertisers desire.
Check the End Caps: Understanding Advertiser Appeal
In order to fully understand what advertisers are looking to achieve on RMNs, it’s important to explore what has made retail media so appealing to the buy-side in the first place. It’s a channel for them to both reach a global pool of highly-relevant audiences, and draw insights from the first-party data that retailers collect.
Attention Shoppers: The Power of Intent-Based Advertising
A large part of the appeal of retail media networks lies in the ability to reach consumers who are more likely to make a purchase. Additionally, a 2019 survey from GE Capital Retail Bank estimated that 81% of consumers research a product online before making a purchase, and a good portion of that research happens on retail sites. Basically, consumers come to retail websites when they’re in a purchasing mentality, and that creates an audience that is uniquely receptive to advertising opportunities.
First-Party Data: Personalized Store Shelves and More
Another plus for RMNs is the detail-rich first-party data that can be accessed from the large scale audiences that major online retail outlets can draw. Advertisers can target consumers at all stages of the purchasing journey based on facets of their shopping behavior and interests.
Segmentation along demographics like age, location, spending habits, and even individual interests are possible based only on a user’s browsing and purchasing history. But this isn’t just an online-exclusive benefit. It also extends to in-store shopping if the retailer has physical storefronts. That kind of targeting power can fuel entire campaigns and ensure maximum returns if RMNs can make this data actionable.
Performance and Processes: Measurement in Retail Media
Each new retail media network needs to be able to price their inventory and complete their delivery with data-driven efficiency. That’s why DV has built direct partnerships with RMNs for major online storefronts to provide the analytics and measurement tools that allow them to maximize inventory value. Verification metrics are a large part of the package for advertisers, and the retail media landscape presents different considerations for buyers and sellers alike.
Smart Home Products and Invalid Traffic
Fraud and invalid traffic (IVT) are constant threats, but retail media networks may see an increase in bot rates due to smart home products like Alexa or Google Home. This is not because the devices themselves are harmful, but because they are “seen” as data center traffic and reported accordingly.
There is a sentiment among advertisers that high amounts of data center traffic could be a sign that the seller is buying impressions in order to pad their delivery measurements. This type of traffic is less likely to reach users, and can hinder campaign delivery, so understanding fraud types across any retail media network can help retailers to better optimize against it. Plus, it will allow retailers to better position their inventory makeup to advertisers.
Unique Page Layouts and How they Impact Viewability Metrics
Viewability is an important KPI for advertisers in just about any setting. But some online retailers may struggle with answering questions about viewability rates. Namely, why retail media viewability may appear to be lower than in other environments. Most of this is due to unique page layouts that are designed for eCommerce purposes. This falls outside the typical types of ad units that retailers and brands might be accustomed to transacting on.
You can think of this as a quality versus quantity issue. A lower viewability rate doesn’t necessarily translate to low-quality impressions; especially if other key metrics, such as attention, are trending upwards. The main distinction to make here is that an online retail audience is already at a point in the purchasing journey, and more consideration should be given to what those users are doing with the ads they see rather than simply if they’re being seen. When working with advertisers, do your best to be transparent along these lines, and manage their expectations. They will be accustomed to giving this metric a great deal of weight and focus, so positioning the unique value that you offer will be key.
Brand Safety and Suitability Requires Additional Nuance
Advertisers have two primary concerns when it comes to brand safety in a retail media space. First, a traditional keyword blocking approach may end up costing brands the scale they came to retail media networks to find. For example, a brand that wants to avoid being hosted beside violent “gun” content may end up excluding themselves from opportunities on product pages for toy guns or water pistols. Depending on the brand, that can end up costing them valuable sections of a retailer’s audience.
Another concern is the relatively common practice of conquesting ads. In a nutshell, competitors may try to redirect traffic to themselves by placing their ads on a rival brand’s product page. Though their effectiveness is subjective, they are enough of a threat to warrant consideration and action on the sell side. Addressing these concerns places onus on RMNs to measure and speak to brand suitability in their conversations with clients.
With nearly one out of every five retail transactions worldwide being made online, and US revenue alone expected to top $1.6 trillion by 2027, online retail is here to stay and so are retail media networks. Though Amazon maintains a firm hold on the industry with a commanding 75% ad revenue share, that hasn’t stopped other companies from creating their own ways to claim their piece of the retail media pie.
That amount of initiative and enthusiasm should be enough to generate some exciting opportunities in the field for years to come. Plus, even with the promising early returns that retail media networks have seen, they are still a comparatively new idea and they seem to only be at the beginning of their money-making potential. With all that in mind, it’s not hard to see their appeal to the entire digital advertising industry.
For years, DV Publisher Suite has helped RMN’s realize their full potential with high-quality measurement and data management capabilities. Request a demo today to see what we can do for you!