Retail Media – Enabling Brands to Shift to an Audience-first Mindset

While retail media can trace its history back decades to humble in-store signage, cardboard cutout displays, and sampling tables, the retail media networks of 2024 are some of the most advanced advertising channels ever created. And with this sector forecast to hit a staggering $140bn ad spend worldwide this year, it has yet to fully realize its potential.

There’s a growing body of evidence that advertisers’ buying strategies in retail media are evolving rapidly. On-site search and display ads are falling out of favor with brands that want to expand their reach through off-site retail media advertising, while many are also now looking beyond the biggest platforms and diversifying their investments in multiple retail media networks (RMNs).

But getting the best out of retail media requires a shift in thinking. Rather than treating it as merely an advertising channel, it can also provide valuable insights about audiences, which can then be used to connect with consumers wherever they are.

Why the potential of retail media has not yet been realized

Though retail media gives marketers access to addressable audiences that are highly proximate to the point of purchase – promising the chance to drive conversions and upsells – these networks are not always perfect. Many exist within walled gardens, for example, which can limit access to performance data that marketers need to make like-for-like comparisons between RMNs.

Indeed, the lack of agreed standards around measurement has long been the stumbling block for the retail media sector, but there are positive signs that this problem is being fixed. The IAB’s first set of standards for retail media measurement was published earlier this year, which will likely provide a catalyst for previously wary brands to invest further in RMNs.

However, marketers wanting to compare RMNs to decide how much budget to allocate to each may be on the wrong track. There is immense value in retail media data, and it can be used for so much more than just assessing per-channel performance. Marketers should take a step back and first think about who their audience is – and how the accurate, recent first-party shopper data that retail media contains can help them understand their profile and likely behavior. Then they would be going down a much better path.

Utilizing data outside of RMNs

Channel-first thinking is limiting. Modern consumers can shop on various devices via multiple platforms, and while this gives marketers more opportunities to engage with them, they can’t be everywhere at once. When consumers expect cohesive, omnichannel experiences, allocating budget based on past performance of each channel alone is a mistake.

If marketers simply look to the channels where they can get the best price and reach the most people – putting quantity over quality – then it will be difficult for them to create the connected experience audiences crave. Multiple campaigns running across several channels could mean that the same consumer will encounter a number of conflicting messages – unless brands switch to audience-first thinking.

An audience first-approach based on the brand’s first-party datasets makes much more sense, and retail media networks can play a key part in unlocking the potential of this data. Through secure collaboration, these datasets can be connected to create a better understanding of customers, and when and how they shop. Through further collaboration, the brand can match this data against the audiences of other media owners.

By taking this approach, brands can understand which channels their target consumers are active in and build tailored audience segments. These allow the brand to run multiple campaigns with different messages and offerings, as they can effectively suppress certain audience segments, ensuring that each encounters only consistent messaging across each touchpoint.

Unlocking the full value of retail media requires audience-first thinking

Retail media data doesn’t have to be confined to media networks. Instead, these real-time insights into what consumers are looking at and purchasing can inform all media buying activities.

Brands should be using data to build custom audience segments and then facilitate interactions with that audience wherever they happen to be. By demanding more from their investments and adopting an audience-first mindset, rather than a channel-first mindset, brands can move closer to the holy grail of advertising – reaching the right person, in the right place, at the right moment.