With retail media set to account for one in eight digital ad dollars, mature retailers are already growing sales by expanding how they reach consumers and the ad products they offer to brands.
Historically, retail media networks have focused on lower-funnel tactics, but Amazon Ads, Walmart Connect, and an ever growing list of other retail media networks are now offering a full-funnel experience to advertisers and media buyers.
What is a Retail Media Network?
According to RetailTouchpoints.com, "Retail media is the broader term used to describe the concept of retailers using their systems, infrastructure, data and access to their shoppers to help advertisers reach consumers. A retail media network is the actual platform that retailers put in place to do this."
These ads can appear in various formats and locations, including search results pages, product pages, category pages, and even in-store displays. But what sets retail media networks apart is their access to valuable first-party data—the key to effective targeting and personalized advertising.
What are the top retail media networks?
Amazon is, by far, the top retail media network, commanding 75.2% of the $45.15 billion US retail media advertising market in 2023, more than 10 times that of No. 2 Walmart Connect.
Other big RMNs include Target's Roundel, Kroger Precision Marketing, Alibaba, Instacart Ads, and Costco Media Network. More are popping up every day!
This blossoming of RMNs offers advertisers more opportunities to put their products in front of their target audience when they're already in a purchasing state of mind, but the downside is a lack of consistency or standardization across the platforms. A media buyer or agency that is well-versed on many different platforms and can pull data from each one together into a holistic media strategy can be helpful in allocating your brand's advertising budget efficiently.
Why is retail media important for media planning and buying?
The expansion of retail media from a last-touch converter into a full-funnel experience is a game-changer for brands and their media planners.
Here’s why retail media matters:
Holistic Consumer Engagement: Retail media networks allow brands to engage consumers at every stage of the buyer’s journey. From awareness to purchase, these networks provide a seamless experience.
Demand Generation: Amazon’s sponsored brand videos and CTV-based offerings create demand by capturing consumer interest. Brands can showcase their products effectively, driving curiosity and desire.
Measurable Impact: With robust attribution and conversion tracking, advertisers can measure the impact of their campaigns accurately. Retail media networks provide the data needed to optimize strategies.
Explosive Growth: The exciting growth of the retail media space presents a lucrative opportunity for brands and advertisers to reach customers in new ways.
Attractive Margins: Retailers face the challenge of covering the incremental expenses and complexities associated with digital ordering and fulfillment operations. High-margin incremental revenues from (RMNs) serve as a means to offset these costs. These networks allow retailers to monetize their shopper data effectively, delivering accurately personalized messages and offers on behalf of brands. Compared to product sales, ad sales carry far greater margins, making them an attractive proposition.
Latent Value: Brands are continually seeking more targeted and efficient ways to reach consumers. Retailers possess valuable loyalty and transaction data, which can be harnessed to achieve this critical task. By leveraging these insights, brands can enhance their targeting precision and engage consumers effectively.
Advertiser Mindset: Brands and agencies have become accustomed to the self-service methods of “programmatic” digital advertising. Retail media networks align with this mindset, connecting brands with consumers efficiently. As a result, media planners and buyers recognize the value of these networks in achieving their advertising goals.
What are the upper funnel benefits of retail media?
No longer relegated to the last touchpoint before purchase, RMNs like Amazon Ads and Walmart Connect are offering more features and options to reach new customers and lift brand awareness, too. Some examples of upper funnel retail media tactics include:
Amazon Sponsored Brand Video: These cost-per-click (CPC) ads link customers directly to product detail pages, allowing them to learn more and make purchases seamlessly.
Amazon CTV-Based Offerings: Amazon’s connected TV (CTV) ads have become increasingly sophisticated, thanks to the wealth of consumer data the company collects. Advertisers can now measure campaign attribution and conversion directly through CTV ads.
Amazon Shoppable CTV Video Ads: Imagine making an Amazon purchase while watching an ad on TV. These shoppable CTV ads bridge the gap between entertainment and commerce.
Walmart’s In-Store TV Walls: Walmart combines digital out-of-home (DOOH) ads with in-store placements. Shoppers, already in a buying mindset, can make purchases right then and there. Walmart’s extensive in-store activations make it a powerful platform for advertisers.
Walmart Acquiring Vizio: Earlier in 2024, Walmart acquired TV maker Vizio for $2.3B, combining the expansive reach and diverse audience of Vizio watchers with the commercial offerings of Walmart, which is sure to accelerate Walmart's catch-up to Amazon.
Target’s Roundel: With access to Target’s extensive shopper data, Roundel enables precise audience targeting and personalized ad experiences. Brands can engage consumers early in their journey, building awareness and consideration.
Instacart Product Recommendations: Brands can reach consumers while they shop for groceries online, combining convenience with targeted advertising. Instacart’s upper-funnel offerings allow brands to influence purchase decisions early in the process.
Albertsons Companies: Albertsons, another grocery giant, is poised to change the retail media landscape. If the impending merger with Kroger goes through, Albertsons will reach approximately 85 million households. This expanded reach will provide valuable data insights, making it an attractive partner for upper-funnel campaigns.
Final Takeaways for Brand Marketers
E-commerce is growing rapidly, and the advertising capabilities of retail media networks are expanding as well. Instead of focusing on providing only lower funnel tactics to advertisers, Amazon and other RMNs are becoming more advanced by offering a full funnel experience. Critically, the time is now for brands to leverage the two largest retailers, Amazon and Walmart, as complete advertising ecosystems.