5 Steps Retailers Can Take to Set Up a Successful Media Network
Retailers have some of the richest first-party data sets, with deep attributes and an acute understanding of consumers. Brands increasingly want to tap into these consumer insights, and retailers are moving fast to ensure they can meet the demand. This has led to the rise of the retail media network (RMN), which allows retailers to monetize customer data by offering advertising space to brand and supplier partners. With e-commerce still booming, and an estimated $52 billion being spent on RMNs in 2023, retailers have a significant opportunity if done right.
In order to ensure their RMN is set up for success, retailers should consider five important factors when launching their own platform:
1. Identify your unique audience.
The first step in standing up a media network is to organize first-party data, which not only identifies who target consumer audiences are, but what makes a retailer’s data sets unique for partners.
To differentiate themselves for advertising budgets, retailers must consider what sets them apart from their competitors and how they can leverage unique strengths to attract brands and suppliers to their network. For example, a relatively small retailer with a loyal customer base and extensive data insights could differentiate itself by offering highly targeted advertising to a very specific demographic.
2. Prioritize granular measurement and insights.
To truly distinguish themselves, retailers must be able to deliver customer insights and closed-loop measurement to their partners, and in a much more granular and transparent way than offered by walled gardens. Brands want to see a return on investment, and retailers must be able to demonstrate that their media network is delivering value.
Though retailers are sitting on a treasure trove of conversion data, it's not necessarily easy to make it actionable. This requires standing up an identity framework to connect online and offline touchpoints across the customer journey while keeping a customer’s personal information private and secure using a single, unified customer ID. Retailers should also track highly detailed metrics like individual SKUs to offer advertisers a deeper understanding of which products are driving the most revenue and which ad placements are most effective.
3. Build for scale.
Do retailers want to build their RMN off a membership model or emulate a platform that spotlights partner enablement across verticals such as convenience and pharmacy? Deciding on a business model that meets desired outcomes is a fundamental element to ensure the media network can scale and grow alongside marketplace demands.
Scalability should be considered a necessity to attract brand partners. In fact, 99 percent of CPGs demand access to 6 million shoppers or more in order to invest in a RMN, or the ability to interoperate with other networks for smaller RMNs. This requires a robust technology infrastructure that can collaborate with external partners and handle large amounts of data and ensure ads are delivered quickly, accurately and safely.
4. Play the long game.
From navigating data privacy requirements to standing out in a saturated RMN market, retailers must take steps to mitigate risk by implementing strict data privacy policies and ensuring all advertising is transparent to consumers who are offering their data in exchange for value from the companies they purchase from.
Retailers will also need patience when building out their networks, which can take 12 months to 18 months to truly take off. This means setting expectations with stakeholders, investing the time necessary to build a RMN the right way, and driving demand through unique data and customer insights. Though this timeline may seem long, it’s worth the wait. By 2024, RMN advertising will grow even higher to over $61 billion, accounting for nearly 20 percent of all digital ad spend.
5. Iterate and sophisticate.
The market simply cannot support dozens of new RMNs, but that shouldn’t stop brands from building them. The natural progression is to cooperate to compete. Imagine a world where the top RMNs combined to provide true scale.
The future of the market is that brands will establish their own RMNs and eventually collaborate their assets together. However, this is only after retailers refine and improve their offerings as they learn more about what does or doesn’t work. All players must add sophistication to their media network — whether it's closed-loop measurement, self-serve access to insights, data collaboration, audience extension and more.
Retailers should remember that building a successful RMN takes time and effort, but the rewards are significant. By staying focused on delivering value to a privacy-centric customer experience and being responsive to the needs of their brand partners, retailers can unlock the full potential of their data.
Kevin Dunn is the vice president of industry sales, retail and CPG at LiveRamp, a data collaboration platform.
Related story: The Value of Retail Media Networks
Kevin Dunn is the vice president of Industry sales, retail and CPG at LiveRamp (NYSE: RAMP). Kevin has worked in the martech and adtech industry for over 15 years. Prior to LiveRamp, he led the digital transformation of Acxiom’s marketing services business, with innovative partnerships that connected online and offline marketing. Before Acxiom, Kevin spent seven years at IBM where he was a founding member of an industry-changing product called Universal Behavior Exchange. He is a graduate of the University of New Hampshire and holds a masters of science from Northeastern University. He currently resides in the Boston area.