Inside Fashion Retailer Asos' Play for Retail Media Budgets

Fashion likes to be ahead of the curve, and getting a shoe-in with retail media—one of marketing's buzzier trends—is no exception. Not content with shipping jeans and beanies, clothing ecommerce platforms like Nordstrom and Asos are joining the likes of Amazon and Walmart in selling advertising space in their digital storefronts.They’re swallowing up ad dollars in the process too, with WPP’s media investment arm GroupM predicting the retail media market will increase by 60% to hit $160 billion by 2027. For now, it captures 11.7% of global ad budgets. The business has signed a three-year deal with ad-tech platform Criteo that will see it launch new ad formats powered by its own first-party data, informed by browser and shopper behavior. These formats include sponsored ads, which will show up in search results after users search for a product, and offsite targeted ads that will run across thousands of premium publisher sites, as well as on connected TV. Asos wants to marry these with the creative solutions it already offers to brands such as Levi's, to facilitate more "cohesive and targeted" campaigns pinned around product launches and seasonal pushes, ultimately growing the size of its clients' ad campaigns and generating more ad revenue during tough economic times. The initial launch will take place across the U.K., U.S., France and Germany in summer, before expanding globally. A ‘cohesive and targeted’ approach Growing privacy regulations, and the deprecation of third-party cookies, have left marketers and media owners looking for fresh ways to reach audiences. Asos has joined a growing throng of retailers digging deep into their first-party data gold mines to offer a solution. Since October 2021, Asos has offered on-site display ads via automated ad auctions that target users based on their browsing habits. With Criteo’s help, these will now be enhanced to deliver more relevant brand messages to custom audiences in-app and in-browser.The bulked-up programmatic muscle is being led by Elton Ollerhead, who joined Asos in April 2022 as director of its Asos Media Group, the business arm that works directly with partner brands offering creative, production and commercial services that result in marketing campaigns on Asos.com, and offsite via social media, targeted email and app push notifications.Asos stocks 17 owned brands and 850 partner brands, from Adidas to Levi’s. At the moment, Ollerhead's business arm serves 150 of the latter, helping them build custom creative “through a fashion lens,” he said. Ollerhead told Adweek his ultimate ambition is to connect these existing creative services with its new digital capabilities to create a more “cohesive and targeted” approach to marketing for the brands that want to reach engaged window shoppers and customers. “We want to look at a brand’s overall objectives for a product or seasonal launch, or even a longer-tail campaign and make sure we’re planning around their objectives rather than splashing a load of imagery around,” he said. Asos' sponsored ads appear amid the 70,000 products the retailer has live at any given time Levi’s will be one of the launch partners for the sponsored ads (which appear amid the 70,000 products Asos has live at any given time) and offsite retargeting with a campaign tied to a relaunch of one of its big labels, according to Ollerhead.“We’ve been working with them to shoot and produce the imagery and use those different ad products in a coordinated way,” he added. A retail media arms race In the U.S., Nordstrom is among the fashion giants already pursuing its ad ambitions with its Nordstrom Media Network, which debuted in March 2022. The number of players in the wider space is fast multiplying, with Uber and European supermarket Carrefour among those that have invested in their own networks over the last six months. However, recent data from MediaRadar has shown that Amazon—an early pioneer of sponsored search results—still commands the lion's share of the market, capturing 37% of all global retail media budgets. While CMOs are upping spend, the market's growth will largely depend on the value exchange between advertisers and retail platforms. Ollerhead said the data Asos hands to brands will be aggregated, with advertisers able to access anonymized audience data based on views, clicks and ROI. "The demand we've seen from brands is that they want to be in a brand-safe, protected environment," he said, noting that Asos' 26-million-strong audience clocks up to 3 billion site visits per year. "It's a well-trafficked site with an engaged customer base," he added. Buyers Face Retail Media Growing Pains as Sector Booms Of course, the play will open up further revenue streams for Asos, which has struggled post-lockdown amid "challenging" trading conditions. In October 2022, the London-based company reported an 89% year-over-year drop in adjusted profits before tax, with newly instated CEO José Antonio Ramos Calamonte revealing a turnaround strategy focused on a new commercial model and a culture refresh.