Retail Media Networks are all over the news lately – and for good reason. But is the time right to start adjusting your ad spend?
Why the Retail Media Network (RMN) hype?
Retail media networks are a relatively new concept in the world of digital advertising, but they are quickly becoming an important tool for retailers looking to connect with their customers and promote their products. These networks, which are essentially networks of digital displays located in retail stores, offer advertisers a unique way to reach consumers in a highly targeted and effective manner.
by Mike Giambattista
One of the key benefits of retail media networks is their ability to reach consumers at the point of purchase. By placing digital displays in close proximity to products, retailers can effectively grab the attention of consumers who are already in the process of making a buying decision. This allows advertisers to deliver highly relevant and timely messages that can help influence the consumer’s decision and drive sales.
RMNs also offer advertisers a wealth of data and insights into consumer behavior. By tracking consumer interactions with digital displays, retailers can gather valuable information about what products and messages are resonating with consumers and use this data to refine their advertising strategies and improve the overall performance of their campaigns.
Yes, but do RMNs work?
The effectiveness of retail media networks at driving purchase behaviors varies depending on a number of factors, including the quality of the advertisements and the level of targeting and personalization. However, many retailers and advertisers have reported positive results from using these networks to promote their products and drive sales.
Many of these networks use advanced technology, such as facial recognition and artificial intelligence, to tailor advertisements to individual consumers based on factors such as age, gender, and interests. This level of personalization can help improve the effectiveness of advertising campaigns and increase the likelihood of conversion.
The numbers are impressive.
McKinsey gushes that RMNs have “the potential to generate over $1.3 trillion of enterprise value in the United States and create a paradigm shift in digital advertising not seen since the rise of programmatic.” eMarketer predicts that by 2024 the US digital retail media ad spend will reach $61.15 billion, making up nearly 20% of digital ad spend. And GroupM posits that Global retail media is likely to reach $101 billion by the end of 2022 (15% higher than a year ago).
Shiny object syndrome?
Jeff Casper is a long-time media and technology analyst and is among a chorus of experts advocating for more data and clarity. According to Casper, “We tend to gravitate toward the shiny new object. But in this case the object is the same object as it has been my entire career and longer. New acronyms and a bit more AdTech don’t necessarily make a brand new (old) channel. What is new is not the channel itself but the way we can gather and use information around it.” Indeed, retailers have been creating new ways of monetizing their physical and customer assets for a long time. Are RMNs the latest iteration of that effort?
Maybe a little patience is warranted.
eMarketer has this channel forecast to become the third “big wave” category after search and social. That implies a lot more than even the current numbers are pointing to. Yes, the benefits to marketers are clear, but putting RMNs in that kind of company is a HUGE promise.
Where’s the proof of the mainstream-ness? Dollars spent and market share percentages only tell the story of a few big players. At the moment, Jeff Casper and a number of others are more interested in seeing how many clients / users each of these RMNs are working with, and the growth of that number over the past and next few years. We plan to keep an eye on that for you.
Mike Giambattista is Editor in Chief at TheCustomer.
Photo by Xiaolong Wong on Unsplash