What’s Next for Retail Media Networks and the Evolution of Consumer Engagement
The growth of retail media networks the past couple of years has been nothing short of remarkable. The unavoidable reality that third-party cookies are in decline, and the subsequent loss of targeting granularity, has ushered in the steep growth of first-party data as an alternative. Retail media is the best manifestation of this capability and unlocks great potential for consumer targeting and engagement.
The ability for marketers to target against audience data with the fidelity that retailers possess has unlocked a tsunami of announcements and new retail media launches. While in parallel, 80 percent of marketers plan to increase their investment in retail media, per a recent LiveIntent survey.
The next wave of growth for retail media networks is using first-party data in more creative and granular ways. The ability to drive deeper personalization in marketing messages will be coupled with more engaging creative messages, delivered in an omnichannel fashion. No longer will messaging be dominated solely by digital display and video. Expansion into DOOH (digital out of home), digital audio and CTV (connected TV) will allow marketers to follow the “consumer’s journey” as they go about their day.
Retail media networks have been a driving force for the evolution in how brands and retailers engage with consumers through the adoption of a high-quality, data-first approach to their marketing. The ability to have data-rich, empirically-based audience segmentation has allowed for greater sophistication in building out on-point and more relevant offers, messaging and engaging creative.
The newfound ability for driving much more personalized campaigns, underpinned by retail media data, has extended to hyperlocal offer-driven content and ads being leveraged to drive in-store outcomes and incremental sales lift for advertisers. The emphasis on incrementality has allowed for robust hold-and-expose-based methodologies that brands can experiment with, given all the dynamic variables now available to them.
The 2023 holiday season will test retailers' commitment to these new practices. Consumers are saddled with elevated nondiscretionary costs, higher consumer debt and rising interest rates and, while inflation is slowing, prices continue to remain higher year-over-year. These factors collectively pose significant obstacles for retailers as they approach a critical holiday season.
To address these headwinds, retailers must prioritize value-driven messaging and implement strategic promotions aimed at attracting budget-conscious customers. Brands have an opportunity to double-down on their leverage of retail media data, coupled with more granular data-driven creative executions, that emphasize value-driven messaging and promotions on a personalized basis. This can take the form of artificial intelligence-driven decisioning around advertising messaging and promotional offers that will allow savvy retailers and retail media clients to drive incremental sales lift through a more targeted and relevant approach.
The overall outlook for the retail advertising space is more compelling than ever. The ability to use additional signals to augment already powerful retail media network data makes for a highly relevant and engaging personalization opportunity, resulting in truly differentiated offers, messaging and calls to action throughout the year. In this dynamic and highly competitive retail landscape, retailers must meet consumers where they are, acknowledging the continued importance of both in-store and online shopping channels. The sheer volume of spend marketers are allocating to the retail media category is enormous, and driven by the experimentation opportunity and valuable data, this will underpin digital advertising for years to come. Importantly, the nascent ability to attract nonendemic brands and advertisers will help drive revenue growth in the category even further.
Paul Prior is COO of Undertone by Perion, a company that creates memorable ad experiences by thoughtfully orchestrating solutions across video, advanced TV, rich media, and social, to drive unmatched brand lift and audience engagement on virtually every screen, and every device.
Paul Prior, COO at Undertone by Perion, is a seasoned executive with 25 years experience in technology and 20 years of digital ad tech and media experience, focused on building innovative, high growth organizations. Paul joined Undertone from Zedo, where as President, he built a forward thinking ad technology company, where he initiated early adoption of viewable-based ad formats, programmatic trading, RTB integrations, Header Bidding, including pioneering Header Bidding for video. Prior to that he led Global Partnerships for Acceleration, which was acquired by WPP. Key strategic deals included early stage partnerships with DoubleClick (Google), Omniture (Adobe), Exact Target (Salesforce) and Epsilon (Publicis). Before that he led ISP Sales for Cisco in his native South Africa.