The retailers thriving today are the ones that have innovated and evolved. They’ve also built strong retail media businesses, inspired by Amazon, that leverage the power of unique audience data.
So what exactly is retail media? In its simplest form, retail media is the placement of brand-funded ads on retailer or ecommerce marketplace sites. It’s a promising sector of the industry that offers opportunities to both brands and consumers. With retail media, brands can connect media spend with online and offline sales and build stronger relationships with both their retailer partners and end consumers.
In the last few months, we’ve seen a lot of buzz about retailers ramping up their retail media efforts. These retailers are right to want to take Amazon’s best ideas. Amazon advertising has become a multi-billion dollar business, thanks to capabilities such as self-service buying for brands and marketplace sellers, full-funnel ad products and robust APIs to integrate with existing brand and agency tools.
Beware the walled garden
As retail media gains traction, new walled gardens could potentially emerge if retailers opt to build their own ad platforms and closed ecosystems. However, most retailers don’t have Amazon’s resources and would face an uphill battle to build the needed technology infrastructure and support functions.
Retailers need to choose between building everything in house, which could take time and potentially end in limited functionality, or partnering with a technology provider that has features in line with brand and agency demands.
Speed is of the utmost importance as well, as context and creative increase in value and as the lines between shopper budgets and media budgets blur. Brands can benefit from spending more money on channels accountable to sales, and retailers can benefit from competing for a wider array of media dollars.
But to keep these dollars flowing to retail media, brands and agencies require flexible tools to reach a variety of campaign objectives, the ability to buy transparently across retailers at scale and normalized metrics to compare performance apples to apples.
Giving brands what they want and need
The problems that brands experience with walled gardens are well documented. Managing campaigns in many platforms is an operational burden, albeit one that meta-demand-side platforms (DSPs) and demand aggregators are working to solve. Disparate metrics, uneven reporting capabilities and different attribution and optimization models create operational and analytics nightmares for advertisers.
These problems are even greater in retail media, where there is no industry body, like the IAB, to set standards and metrics (such as SKU-level sales results) that are essential to the value proposition for brands.
Indeed, few bigger retailers might thrive with their own platforms, but in a world where more brands and agencies want to consolidate spend with fewer platforms, making it easier for them to buy retailer ad inventory is paramount.
If retailers choose to create closed platforms, they will be putting their nascent ad businesses at risk, competing not only with Amazon, but with giants like Google as well.
To propel retail media to the next level of brand investment, retailers need to enable brands to reach consumers across all places they sell products using common workflows, standardized metrics and transparent reporting.
If retailers band together and allow the rising tide to lift all boats, they can create a thriving ecosystem that sets the standards for how brands and agencies buy. By participating in this retail media ecosystem, they can turbocharge a new revenue stream, deliver a quality shopping experience, drive more product sales and reinvigorate the digital retail landscape as we know it.
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As EVP and general manager of the growth portfolio at Criteo, Geoffroy Martin is responsible for incubating, operating and growing adjacent businesses within the company. As part of this role, he oversees Criteo’s Retail Media Division, managing everything from sales to product development.
