Retailers of all sizes are quickly forming plans to use their valuable consumer shopping data to expand their digital media offerings off-property and capture some of the $50 billion in projected ad spend for 2023.
This frenzy is accelerating as the ad-tech industry grapples with seismic shifts in digital privacy and identity, driving fundamental changes in how and where audience data will be activated.
As retailers embark on the retail media network journey, they must make a foundational decision. They can either build their off-site retail media business on a single demand-side platform (DSP) and connect with a few supply-side platforms (SSPs) for inventory, such as Walmart has done with The Trade Desk. Or retailers can take the approach Kroger Precision Marketing and Target’s Roundel have taken: run the business on the sell-side and enable access across several DSPs.
There are two notable factors retailers must understand and consider when making this decision. First, third-party cookies are eventually going away, or at the very least, will be severely restricted in Chrome as they already are in Safari and Firefox. Second, connected TV (CTV) will be essential to any scaled media offering. CTV has always been “ID-challenged” to some extent, given an inherent lack of third-party cookies or reliable device IDs and cautious CTV media owners that are highly protective of their customer data.
Retailers should note what this all means: Audience activation will increasingly shift to the sell-side. As soon as DSPs stop receiving third-party cookie signals, sell-side platforms that have invested in systems to onboard and match against publisher first-party signals will become an essential partner for scaled audience activation and measurement.
With the goals of retailers and this evolving data activation landscape in mind, here are three key reasons why the sell-side is best-positioned to help retail media businesses make the most of their valuable data assets today and into the future.
1. Future-proofed data activation at scale
Ad tech is highly fragmented, and the future of identifiers and audiences is no different. There will be many so-called universal IDs, and there is unlikely to be any single identifier that provides sufficient scale. Retailers shouldn’t lock themselves into just one identity ecosystem but partner with sell-side platforms that support many universal IDs.
But universal IDs will only be a part of the answer, as they inherently rely on logged-in internet users, representing a fraction of internet traffic. Sell-side platforms sit closer to publisher first-party identifiers. They have built data solutions such as clean rooms and matching services to connect high fidelity identifiers between the buyer and the seller, allowing audience activation without universal IDs. This is particularly relevant for CTV publishers, who can identify their customers but withhold that information from the bid stream.
Given that shopper data is paramount, retailers can future-proof their approach by building activation paths on the supply-side.
2. Scaled access to supply and demand
Speaking of fragmentation, programmatic buyers often rely on numerous buying platforms to access consumers across the many devices and ad formats offered by media owners. While marketers typically work with several DSPs (including Amazon), if retail media offerings increase as expected, it’s hard to imagine marketers will have the desire or capacity to log in to many more DSP campaign workflows.
By working with a scaled, omnichannel sell-side platform, retailers can simplify activation for their clients, allowing them to run campaigns in their preferred DSP and therefore seamlessly align to their existing workflows. At the same time, focusing activation on one or a small number of sell-side partners ensures a consolidated access point for premium display, online video and CTV.
Reducing friction to onboarding advertisers will increase the number of budgets a retailer can capture and accelerate the speed of activation.
3. Protected shopper data alongside a DSP-agnostic approach
While retailers vary in size, specialty and the maturity of their programmatic media businesses, they all have one thing in common: protecting their shopper data is the top priority. The good news is that certain sell-side platforms offer robust data protection without the need to create a restrictive “walled garden” or a siloed DSP workflow.
Retailers can remove or obfuscate IDs from the bidstream; they can selectively permission which marketers and DSPs can activate a campaign and control the types of buy-side data collection in place to ensure there is no data leakage. Media owners are increasingly seeking the same protections and controls from their direct sell-side partners, meaning retailers will also benefit from ongoing innovation in this area.
By working with a sell-side platform, retailers can give advertisers what they want and ease of access while also protecting the valuable shopper data that makes their offering unique.
Programmatic retail media has vast potential to unlock highly relevant purchase-based audiences to marketers globally. Each retailer will make many decisions along this journey. They will be best served to consider the sell-side led approach that provides the flexibility, scale and control they need to succeed in what is quickly becoming—in classic ad-tech fashion—a crowded space.
—
Sean Buckley is Magnite’s chief revenue officer and is responsible for sales, customer relationships and partnerships globally.
