Demystifying Retail Media Networks: 4 Steps for RMN Success
When BCG researched commerce media, it sized an industry expected to reach $10 billion in ad spend by 2025. Major retailers like Amazon.com have normalized retail media networks (RMNs) and are already maximizing their income potential, but smaller RMNs are also growing fast. Why do RMNs continue to gain traction and grow in value? It’s because they offer significant opportunities for brands to differentiate themselves and strengthen their relationships with consumers.
That makes RMNs especially important for direct-to-consumer (DTC) companies, which aim to close sales without going through wholesale channels.
Though accelerated by the pandemic, the DTC space keeps heating up because it's no longer defined by digitally native companies. In addition to new and emerging brands, this crowded arena now includes existing brands investing in a more impactful digital presence as well as brick-and-mortar businesses expanding their reach online.
Inside the big tent that is DTC, marketers who understand how to make the most of RMNs as part of a broader integrated strategy will help their brands stand out and drive sales.
Here are four key elements DTC marketers should consider when choosing a RMN that aligns with their marketing goals and objectives.
Reach and Audience
RMN advertising offers bottom-of-funnel placement with a ready-to-purchase target audience. However, to make the most of the investment and convert browsing shoppers into buyers, DTCs have to prioritize precise audience targeting. Ads in RMNs need to show up where consumers are already looking to purchase the DTC’s product types, and they need to hone in on the right consumer. Take advantage of RMNs’ targeting features not just to gain impressions, but also to get in front of your ideal consumer.
Ad Formats and Content
Different RMNs may offer different types of ad formats, like display ads, native ads or sponsored product listings. It’s important to consider which ad format works best for a product or service, and ensure your content is appropriate for that format.
While this sounds simple, integrating with other marketing channels makes this process more challenging. If your brand is running campaigns across multiple channels, explore whether the RMN can integrate with the other marketing platforms, like Google Ads or Facebook Ads, to help you create a cohesive marketing strategy.
The process can become very complex, but it doesn’t have to be complicated. A good agency partner will be able to provide a content management solution for repurposing and repositioning content in the right channel, while driving personalization to enhance your brand’s direct relationship with its customers.
As data privacy concerns continue to grow, some retailers are becoming more cautious about sharing customer data with advertisers. That could make it even more challenging for brands to accurately measure the performance of RMN advertising.
Marketers need to stay on top of collecting, managing and analyzing terabytes of data — and use it strategically for their advertising. Find a smart and experienced partner that can automate this process so you don’t unnecessarily drain precious marketing resources with this critical task.
While RMNs can be powerful, their increasing numbers and variety can make it tough for brands to ascertain which platforms and ad dollars are really driving growth. More channels means more opportunities — and also more complexity to manage.
Because each network is different, there’s no standard set of metrics to evaluate performance. Each platform has a unique set of key performance indicators, which makes it difficult to compare the performance of different RMNs. And different RMNs may have different pricing models. Start with one or two RMNs that are aligned with your brand’s objectives and get a good handle on their investments and profits. As your RMN expertise grows, consider expanding across all the RMNs where your brand advertises.
RMNs can be like rocket fuel for a DTC brand. However, with their tremendous opportunities also comes a new level of complexity. When marketers engage today’s powerful RMNs with rigor and strategic focus, they’ll get their brand noticed and create lasting connections with their target audience.
Marcus Lancaster is head of strategy, DTC at Quad, a full-service marketing agency.
Related story: How Retailers Can Prepare for a Second Wave of Retail Media
Marcus Lancaster is the Head of Strategy for DTC at Quad, a global marketing experience company. He leads DTC and e-commerce solutions for Quad and has expansive knowledge about emerging industry trends. Throughout his 30-year professional career with Quad, he has worked with marketers to facilitate frictionless, measurable and scalable marketing campaign development to help brands achieve their goals. His expertise includes marketing strategy, content creation, omni-channel deployment, analytics, and more.