According to forecasts from Insider Intelligence, ad spend for the retail media industry is expected to pass £4bn in the UK this year and is set to almost double by 2027. Kochava, a provider of real-time data solutions for omnichannel attribution and measurement, says that the growth in these networks offers a unique opportunity for brands to optimise their ad strategy and meet their audience in the digital or physical aisles.
Retail media networks are advertising platforms that allow brands to advertise on a retailer’s website, in-store, via its app or other digital channels to an already engaged audience. Brands benefit from the retailer’s first-party data to gain insight into what shoppers are browsing and purchasing, helping them target the right customers.
The prominence of these new networks is growing fast. Just last week, online supermarket Ocado announced it is launching its entry into retail media networks with claims it will help ‘drive measurable growth’ and deliver ‘relevant advertising and a personalised experience’. Elsewhere, in February the Co-op announced its launch of the UK’s first retail media network in the convenience sector while Tesco and Boots started building theirs back in 2021.
Jason Hicks, GM, at Kochava, outlines the key drivers behind the growth in retail media networks and how brands can leverage it to their advantage:
1. First-party data
Whether the future has cookies in it or not remains to be seen. In the meantime, brands are looking for other sources of digital data to enhancetheir advertising and lucky for them, retailers are sitting on this data in their loyalty initiatives. These programmes hold a range of first-party data, which is GDPR compliant, and can be used to target their customers efficiently and effectively.
Being able to address your audience more accurately supports advertisers in building better, more informed relationships and can be the difference in a competitive market. On the other side of the equation, retailers are able to leverage this data to open a new revenue stream.
2. Removing areas for uncertainty
The advantage of running ads on first-party owned data is that it reduces uncertainty. You know your audience and can intelligently target them, leading to better returns. Optimising your marketing strategy means maximising your returns and being able to confidently support them with reliable data.
3. Added visibility
For brands, retail media networks offer an invaluable opportunity to meet your audience as they are actively browsing, whether it’s online or in-store. Utilised in the right way, they offer a unique opportunity to strategically impact buying decisions via added visibility at just the right moment.
Though they come in many forms, the underlying truth to retail media is that it offers brands a chance to stand out on the digital or physical shelf, and this will no doubt only drive its further growth in the coming months and years.
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