Especially for consumer brands, retail media has been a go-to tactic for reaching consumers closer to the point of sale for ages. (Think of long-seen examples like sponsored, brand-spotlighting endcaps on grocery-store aisles and other paid-for product placements and promotions in stores.)
But in the digital age, retail media has expanded well beyond its in-store roots. And especially over the past few years, it’s seen a substantial surge in popularity and gained much more attention from marketers — and all for good reason. In fact, ad revenues from retail media are projected to surpass those of TV advertising by 2028.
So just what is retail media advertising, and why is it important for today’s brands to be aware of it? Read on for an introduction to retail media, along with details on some of the advantages and opportunities it offers.
What is retail media advertising?
Retail media advertising involves leveraging retailers’ assets, spaces and first-party sales data to reach consumers closer to the point of sale. In the modern age, campaigns run via retail media networks. Additionally, they can span retailers’ digital spaces and their physical spaces, as well as tap into their data and other resources to elevate the effectiveness of ad campaigns served elsewhere.
In the digital realm, think of retail media as the ads you see while browsing online stores, such as sponsored product listings, banner ads or promoted search results. And in the physical world, consumers might see brands leverage retail media by paying to have their products promoted or featured prominently in brick-and-mortar stores via tactics such as shelf signage, floor graphics and digital screens. Wherever they’re served, retail media campaigns help brands target shoppers who are already interested in buying products or services similar to their own offerings, making those campaigns an effective way to boost sales and visibility. They offer brands a chance to showcase their offerings to bottom-of-the-funnel consumers while they’re in the shopping mindset, helping increase the likelihood of conversion.
Beyond all that, retail media advertising can involve tapping into other retailer assets such as their first-party shopper data. This can be leveraged to drive more targeted and relevant ad campaigns both on retailer-owned channels and third-party channels such as on social media platforms, email channels, digital billboards or other websites that the retailer doesn’t own.
The top benefits of running retail media ads
Because retail media ads reach consumers in such close proximity to the point of sale and can be informed/driven by first-party retailer data, they can bring a long list of benefits for brands that leverage them. Some of these can include:
- A more targeted audience: Retail media platforms allow advertisers to reach highly targeted audiences based on shopping behaviors, demographics and interests, ensuring ads are seen by those most likely to convert into customers.
- Contextual relevance: Retail media ads are displayed within the context of the shopping experience, making them more relevant and increasing the likelihood of consumer engagement and conversion.
- High-intent shoppers: Retail media advertisers can connect with consumers who are actively searching for products or are already in the buying mindset, leading to higher conversion rates and return on investment.
- Data-driven insights: Retail media platforms provide detailed analytics and insights into campaign performance, allowing advertisers to optimize strategies and allocate budgets effectively.
- A competitive advantage: By leveraging retail media, brands can gain a competitive edge by outbidding competitors for prominent ad placements and capturing the attention of potential customers at critical touchpoints.
- Seamless integration: Ad formats on retail media platforms seamlessly blend with the user experience, creating a non-disruptive advertising environment that helps enhance brand perception and drive engagement.
- Performance-based pricing: Many retail media platforms offer pay-per-click or pay-per-action pricing models, ensuring advertisers only pay for measurable results, such as clicks, conversions or impressions.
- Enhanced brand awareness: Consistent visibility across retail media channels helps reinforce brand awareness and recognition among consumers, leading to increased brand loyalty and trust over time.
- Cross-channel synergy: Retail media campaigns can complement broader marketing strategies by aligning with other digital channels, such as social media or search advertising, to create a cohesive and impactful omnichannel marketing approach.
- Opportunities for retailer collaboration: Collaborating with retailers on retail media campaigns can foster stronger partnerships, access to exclusive audience data, and co-branded opportunities that drive mutual benefits for advertisers and retailers.
The leading retail media opportunities
Today’s retail media landscape is dominated by corporate names that the vast majority of modern brands and consumers are sure to recognize. Some of the leading retail media networks include:
- Amazon — Amazon’s retail media network, known as Amazon Ads, is by far the nation’s largest, accounting for roughly three-quarters of ad revenue share in the retail media market. With millions of shoppers visiting Amazon’s platform daily to browse and purchase products, the opportunities for advertisers are extensive. Amazon Ads provides a variety of ad formats, including sponsored product ads, sponsored brand ads and display ads, enabling brands to showcase their products prominently throughout the Amazon shopping journey. One of the key advantages of advertising on Amazon is its robust targeting capabilities, which allow advertisers to reach consumers based on their purchase history, search behavior and demographics, helping ensure that ads are delivered to the most relevant audiences. Additionally, Amazon’s advanced analytics and reporting tools provide advertisers with valuable insights into campaign performance, allowing for real-time optimization and maximizing return on investment.
- Walmart — Known as Walmart Connect, Walmart’s retail media network is the nation’s second-largest after Amazon (by a sizable margin), but it offers advertisers access to a vast audience of shoppers both online and offline. With millions of customers visiting Walmart’s website and physical stores nationwide every day, the opportunities for advertisers are extensive. Walmart’s retail media network provides a range of advertising solutions, including sponsored product listings, display ads and native placements, enabling brands to showcase their products prominently throughout the customer journey. As with Amazon, one of the key advantages of advertising on Walmart’s platform is its rich shopper data, which allows advertisers to target consumers based on their shopping behaviors, preferences and demographics. And Walmart’s robust analytics and reporting tools also empower advertisers to measure and optimize campaign performance in real time, helping advertisers maximize their return on investment.
- Instacart — Called Instacart Ads, Instacart’s retail media network offers advertisers the opportunity to connect with consumers in the rapidly growing online grocery market, including the millions of U.S. users who rely on Instacart for their grocery shopping and delivery needs. Instacart’s retail media network offers a variety of advertising solutions, including sponsored product listings, banner ads and featured placements within the app, allowing brands to effectively showcase their products to a targeted audience. One of the key advantages of advertising on Instacart is its deep understanding of consumer shopping habits and preferences, enabling advertisers to deliver highly relevant and personalized ads to shoppers as they browse and shop for groceries. Further, Instacart’s advanced targeting capabilities allow advertisers to reach consumers in specific demographics and geographic locations, and even target users based on their past purchase history, helping ensure that ads are delivered to the most receptive audience.
- Target — Dubbed Roundel, Target’s retail media network offers a powerful platform for advertisers seeking to engage with consumers across various shopping categories. With a diverse customer base and a strong presence online and in-store, Target offers advertisers unique opportunities to reach shoppers at different stages of their purchasing journey. Target’s retail media network includes a range of advertising solutions such as sponsored product listings, display ads, search ads and social ads, allowing brands to showcase their products prominently and effectively. Target’s platform, too, offers extensive data and analytics capabilities, which enable advertisers to target specific audience segments based on demographics, shopping behaviors and interests. Additionally, Target’s seamless integration of digital and physical retail channels provides advertisers with the opportunity to create cohesive omnichannel marketing campaigns that drive online and in-store sales.
- Kroger — Known as Kroger Precision Marketing, Kroger’s retail media network offers advertisers another powerful way to connect with consumers in the highly competitive grocery and retail industry. With an extensive footprint of stores and a rapidly growing online presence, Kroger offers advertisers a unique opportunity to reach shoppers across various channels. Kroger’s retail media network encompasses a wide range of advertising solutions, including sponsored product listings, display ads, emails and personalized offers delivered through its loyalty program, allowing brands to effectively showcase their products to a highly engaged audience. One of the standout advantages of advertising on Kroger’s platform is its wealth of first-party data, derived from its robust customer loyalty program and online shopping platform, which enables advertisers to target shoppers based on their purchase history, preferences and behaviors. Further, Kroger’s commitment to innovation and customer-centric initiatives presents advertisers with opportunities to collaborate on exclusive campaigns and promotions, helping drive brand awareness and loyalty.
Brandon: Your media and digital strategy experts
With a deep understanding of what works — and when it works best — in today’s diverse media landscape, the media and digital strategy pros at Brandon are adept at leveraging best-in-class technology and research tools. Those tools ensure that your brand’s message reaches the right consumers in the right place and at the right time. And when your brand needs expert help planning and executing marketing campaigns ranging from retail media advertising to paid social media, traditional media, influencer management and beyond, you can count on us to provide the experience and know-how needed to deliver success.
Further, as a fully integrated marketing firm, our team of certified brand strategists and data-driven marketing professionals can cover the full spectrum of your brand’s marketing needs. From e-commerce, influencer marketing, email marketing and SEO to social media, digital marketing, media, creative, analytics, public relations, brand strategy, web design and more, we can cover all of your marketing needs in one place. To get started with help ranging from a simple website analysis to a comprehensive strategy tailored to boost the performance of all of your marketing campaigns, contact us today.