What Comes Next for Retail Media 2.0?

We all know where retail media has been. The channel has a history that dates back to at least 2012, when Amazon became a pioneer in the space and launched its first retail media network. That set off a chain of events that forever changed adtech as we know it. Walmart followed suit, with the integration of its own in-house advertising solution that offered brands the ability to target customers with incredible precision. 

Now, more than a decade later, retail media advertising revenue is set to exceed television revenue for the very first time, and adtech leaders are asking what comes next.

It’s a question Kevin Dunn grapples with on a daily basis. As vice president of industry sales, retail and CPG at LiveRamp, a data collaboration platform known for working with the likes of Walmart Connect, Albertsons Media Collective, Dollar General Media Network, CVS Media Exchange, and Sam’s Club Member Access Platform, Dunn has a up close look at what retail media has grown into

Street Fight recently connected with Dunn to get his perspective on retail media 2.0, from the proliferation of media networks now on the scene, to the ways physical stores are having an impact on this online channel. Here’s what he said.

Q. What do you see as the biggest story when it comes to retail media networks in 2024? What are people in your circles preparing for right now? 

A. The proliferation of media networks was profound this year, and while I predict this growth will continue, we can also expect new challenges due to opportunities around consolidation, data standardization and measurement. 

The lines are blurring between shopper/trade and national spending as media channels that were once fully owned by national budgets are now offerings that are available with media networks. 

Moving into 2024, this will give media networks more of an opportunity to tap into national budgets, with the caveat that they will need to follow activation and measurement guidelines that are much more stringent. Media networks will continue to grow if they can prove conversion and have an engaged customer base. 

On the contrary, I also predict that advertisers will consolidate the number of media networks they work with if processes can’t be streamlined allowing more programmatic buying. It’s also likely we will see the closing of networks that lack the ability to prove performance for national brands and others will pursue various traditional merchandising strategies such as direct mail to maximize their revenue and provide value.

Q. Why are so many advertisers having a hard time comparing the performance of one media network from the next? What can we do to fix that?

A. Retail media is catapulting and headed for a projected $10 billion increase in 2024. As a result of this massive growth, the industry can expect added complexities and measurement challenges. The lack of standardization across RMNs has made it difficult to evaluate campaign performance and see clear ROI. 

IAB recently released the IAB/MRC Retail Media Measurement Guidelines, which is a good first step to giving brands a framework, but the challenge will be with implementation. Putting the guidelines in place will be a long process due to measurement teams being understaffed. In addition, the lack of technology required to automate some of the IAB requirements, such as suppressing natural conversion from advertising, may be difficult. 

Retailers need to work together and use a common way to define ROI and provide insights that truly show the advertisers the success of their objectives. This will mean competitive media networks working together, especially the smaller ones, and if done correctly, all tides will rise.

Q. How do you see physical stores making a big impact on RMNs in 2024? 

A. E-commerce and online marketing are becoming much more expensive, leaving retailers to revive brick-and-mortar stores and experiences. This “new era” for physical stores presents a significant opportunity for media networks to evolve. While in the past, retailers jumped ship on in-store advertising due to obsolete screen systems that lacked real-time adaptability, the surge in video content across social media and CTV platforms has unlocked fresh opportunities for brands to impact in-store conversions. 

Transparent measurement with in-store advertising will still pose challenges for retail brands, but there are solutions available. Exploring data collaboration as a means to validate whether an online advertisement influenced an in-store purchase, or vice versa, will help advertisers make informed decisions about their spend and ultimately achieve a higher ROI. 

Additionally, it presents retailers the opportunity to revisit a loyalty program which not only bolsters the in-store experience, but creates a powerful data set for the media network, as well.

Q. What role do you see AI playing in RMNs going forward, and what should media networks be doing now to prepare? 

A. As AI evolves, so will its role in enhancing media networks. AI is becoming an invaluable tool for predicting consumer behavior and optimizing ad campaigns. It will help retailers anticipate trends and personalize product recommendations in a way that we haven’t seen before. 

To be ready to harness the true potential of AI with media networks, first safeguarding data integrity will be of utmost importance. Brands must meticulously curate their data to yield valuable insights that enhance the overall consumer experience. Neglecting this crucial step could potentially lead to the alienation of loyal shoppers.

Q. What else should we know about the state of media networks that might help others in the industry capitalize in 2024? 

A. I do anticipate media networks will grow in new verticals, such as rideshare and food delivery services, but the truth is media networks aren’t for everyone. If a brand lacks first-party data, loyalty data or deep behavioral insights, they may not be in a favorable position to deploy a media network. However, the value of data is still important and brands can monetize it no matter what with data collaboration. This process enables brands to securely share first-party customer data with one another to unlock new insights that open a new world of possibilities such as audience segmentation, improved personalization, cross-channel engagement, identity resolution and more.