Report: Advertisers Lean-In on Retail Data
Retail data is changing the game for U.S. advertisers, presenting an incredible opportunity for those interested in closing the loop between digital ad exposures and actual sales.
That’s according to a new report by The Trade Desk, an independent platform for digital advertising, which found that 91% of U.S. advertisers plan to maintain or increase their investment in retail data in the next few years, and nearly three-quarters (68%) of advertisers that don’t currently use retail data say they plan to use it in the future.
Loosely defined as any information that retailers collect about their business and consumers, retail data can be collected through sales and loyalty cards, or it can be offered via third-party platforms. It differs from retail media, which is the inventory owned and operated by retailers on their e-commerce sites.
For more than a decade, retailers have been gradually giving advertisers more options to tap into their first-party data, leading to more informed digital media buys. The trend got a big boost at the onset of Covid-19, which had the effect of boosting online sales and making e-commerce websites some of the most valuable assets in digital real estate.
As e-commerce sales gradually decrease back to their pre-pandemic levels and retailers look for new opportunities to monetize the properties they already own and operate, retail data is standing out in uncharted territory.
Leveraging Retail Data for Effective Campaigns
It’s widely known that advertisers are constantly on the hunt for innovative ways to target their audiences more effectively and drive meaningful engagement with their products and services, but new data from The Trade Desks backs up those assertions. According to the report, 81% of U.S. advertisers are reportedly using retail data currently, and 57% say they’re willing to use up to a maximum of four retail data partners.
By harnessing the information generated through consumer transactions, advertisers have the opportunity to gain valuable insights into customer behavior, preferences, and trends. This data-driven approach is improving the way brands connect with their target demographics and is proving to be a win-win for both consumers and businesses.
Advertising campaigns driven by data-driven insights are generally more likely to yield better results, since they’re guided by a deep understanding of what motivates consumers to make purchasing decisions. In turn, this leads to higher conversion rates, increased sales, and ultimately, a more efficient and cost-effective marketing strategy.
More Education is Needed
Despite the optimistic outlook, The Trade Desk did find that some challenges remain for retail data, and retail media more broadly. Specifically, The Trade Desk’s analysts found that there is a market need for more education about how retail data can help brands.
This proliferation of retail media networks has also created a few pain points for advertisers. For example, advertisers in The Trade Desk’s survey reported feeling “overwhelmed” by the number of potential retailers to activate against. More than half (57%) said they “prioritize working with the biggest and/or most relevant retail media networks” over their smaller competitors. Amazon Advertising and Walmart Connect are the top two retail media networks that advertisers report advertising on in the last year, followed by eBay, Etsy, and Target Roundel.
For smaller retail media networks to flourish, The Trade Desk found that they’ll need to embrace more openness and cross-platform integrations. Ninety-five percent of advertisers reported having challenges related to the walled-garden environments of retail media networks, and 63% of said a “centralized self-service platform that includes integrated planning and buying tools” would be a motivating factor when activating retail audiences or measurement on a DSP.
