Retail Media: Is it Working? Perspectives from Perion

Perion is a company that connects advertisers with consumers.  They work with leading global retailers and brands such as Albertsons, Kroger, Macy’s, and Home Depot.  Perion’s CEO and Director, Tal Jacobson, recently spoke with us about the surge in retail media networks. As more MULO (multi-location) brands develop their own advertising networks, we are starting to see the data that supports the effectiveness of owned and managed advertising networks.

It enables a level of personalization and cross-promotion that was more difficult and costly when these brands relied solely on third party media opportunities. Here is Jacobson’s perspective:

“Retail media offers several major advantages, which is why ad investments in it are surging.

First, there are retail media networks, like Amazon, which show ads on their owned and operated properties. Brands are seeing success there because they can leverage Amazon’s rich first-party data to target audiences, show the ads directly in that audience’s Amazon shopping experience, and accelerate the path to purchase. This is proving to drive engagement. A DoubleVerify study, for example, found that retailer owned and operated inventory had an engagement rate 183% higher than the norm.

Secondly, there is a growing omnichannel opportunity in retail media.  You can take a brand’s first-party data, combine it with advanced AI, personalized targeting, and creative, and power a cross-media campaign across the digital universe to get the maximum impact. This is often referred to as off-site extension and all of the top retail media players are doing it, while looking to expand channels to include CTV and DOOH, for example.

Finally, the data opportunity here is difficult to ignore. Let’s face it: traditional online identifiers, like cookies, are deprecating, driven by nervous browser companies and rising regulation. Retail media technologies make it possible to access rich, high-quality first-party data that can plug that gap and support addressability as the open web becomes less targetable.”

Who is doing it well? Why?

“Amazon is the king of retail media networks, leading the market by far. But Amazon is riding a wave others are recognizing, as well, with Kroger, Target, Walmart, and Home Depot all having also established their own impressive media networks. 

“An interesting evolution to keep an eye on has been the rise of physical retail media networks. The players doing retail media well, like Walmart and Target, are now working to replicate that success offline, in brick-and-mortar stores. Retailers that integrate online and in-store through technology like programmatic digital out-of-home to show targeted ads in aisle or at checkout, for example, will drive stronger results and increase revenue for themselves and their partners. This opportunity is why in-store retail media spend is expected to reach over $1 billion by 2028.”

Is there a risk of oversaturation? How do brands guard against this?

“Oversaturation is always a concern in advertising, especially as more retailers build media networks and more brands advertise on them. However, the key to avoiding that lies in relevance and timing. Fortunately, retail media have access to a wealth of high-quality data to enable better personalization, especially as cookies crumble. By using first-party data and coupling that with audience segmentation, brands can ensure their ads are hyper-tailored and delivered when the consumer is most receptive and in the right mindset. The technology, of course, plays a key role here as well, supporting data-driven decisions and dynamic optimization of creative.”

What are some of the commonalities and differences across industries that have their own networks?

“A key commonality is their reliance on first-party data. Additionally, many networks use similar formats, like sponsored product ads, though the specific types used can vary by retailer.

The main difference is in the omnichannel nature of media networks. Some are only on-site, or offer on-site and off-site extension, where their data is used to power better advertising not just across their owned and operated inventory but with third parties. That channel integration is where the variance really comes into play.”

Predictions for the future?

“The future of retail media is trending towards deeper integration between online and offline channels, with the offline component being crucial. I anticipate continued growth in the adoption of DOOH advertising as retailers strive to seamlessly connect online and offline experiences, thereby enhancing overall brand engagement. Last year, we acquired Hivestack, a programmatic DOOH advanced technology platform, recognizing the value of a fully integrated solution that operates both within brick-and-mortar stores and externally—on city streets, at bus stops, or airports. Creating and connecting these experiences is essential for effective advertising across any channel.

As retail media evolves into a more omnichannel approach, the focus on measurement will also intensify. Increased spending in this category, coupled with a diversity of formats and advertising channels, will emphasize the need to demonstrate transparency and prove ROI and ROAS.”

Anything else you’d like to add?

“Retail media is a significant growth driver for advertising, and we embraced it early by integrating retail media and other emerging channels like CTV and DOOH. We’ve been rewarded with explosive growth in retail media, as seen in our Q2 numbers.”

For more insights into these media channels and how your brand can take full advantage of this trend, join us at Street Fight LIVE on November 7th.