2023-07-02 22:01:00
Commentary by Christoph Truppe, Director Business Development, adverserve & iab board member
Retail media is a growing trend in the digital marketing industry. The IAB Europe forecasts European retail media sales of 25 billion euros by 2026. But what does this term mean?
Retail media includes and marketing activities that take place on trading platforms, retail websites or in a retail-related environment. These activities span a wide range of channels such as onsite, app, social media, email or offsite, with in-store displays, digital signage and DOOH. In this way, companies can advertise their products and services in a targeted manner and reach customers who are already on the respective trading platform or in the store to search for or buy products.
But wait a minute, hasn’t this been known since the 2000s? That’s right, Amazon was a pioneer in this area and showed how successful retail media can be. In recent years, the topic has also gained in importance for other providers. Why? There are various factors that contribute to this. One of the drivers is the increasing need for first-party data. In a world where the ability to target using third-party cookies is dwindling, merchants are realizing the true value of the data they hold. Retail Media offers access to valuable first-party data and thus creates a basis for targeted campaigns. Merchants have valuable data at their disposal that is of great importance to other advertisers. Another attractive aspect of retail media is the transaction-related environment, which comes close to closing the deal. The pandemic has further boosted retail media development as e-commerce experiences an unprecedented upswing. Retailers and marketplaces are increasingly being used as product search engines.
As with any emerging trend, it remains to be seen whether expectations can be met. There are still many questions and challenges that need to be answered: how will walled gardens and open standards evolve in this emerging landscape? Will merchants be able to build their own AdOps and Sales teams or find the right partners? Will local retail media networks gain in importance or will a global player dominate the scene? How can the different platforms (retail media networks) evaluate their KPIs effectively and can they be analyzed comprehensively?
With all these questions, one must not neglect creativity. A crucial element of retail media are the so-called product ads (“customers who bought product XY are also interested in product AB”). By creatively incorporating context and usage situation, these ads can stand out from the crowd and go beyond mere standard recommendations. Here lies the potential to inspire customers with innovative and inspiring messages and to build long-term customer loyalty.
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