You’re on amazon.com, checking the product page for one of your brand’s best-selling items.
Then you spot it — a competitor’s ad for a similar item, complete with a discount code and free shipping.
Exactly how did a rival brand get its ad and special offer in front of an Amazon shopper looking at your product?
It’s called retail media advertising, and it’s changing digital advertising to the tune of billions in ad spend from both B2B and B2C brands. Read on to learn what it is, how it works — and if it could be right for your marketing strategy.
How Does Retail Media Advertising Work?
To put it simply, retail media advertising places ads right on retailers’ digital channels, such as their websites or apps, where consumers are shopping. Think of it as the online equivalent of those on-shelf coupon dispensers or point-of-purchase displays you see in brick-and-mortar stores.
Instead of aisles and endcaps, these e-commerce ads show up on retail media networks, which sell ad space on their digital channels to third-party brands. The most common retail media networks are Amazon Advertising, Walmart Connect, Target’s Roundel, and Best Buy’s Retail Media+.
Retail media advertising is so exciting to brands because it lets them reach consumers who are actively shopping online. Consumers who are already in a purchasing mindset tend to have a higher likelihood of buying compared to those still considering. Through retail media, brands can show shoppers ads that are personalized and targeted with messages intended to sway their decision at a key moment in the purchase funnel. In short, retail media and specific keyword targeting help us get in front of the right people, at the right time, with the right ad.
Retail media and specific keyword targeting help us get in front of the right people, at the right time, with the right ad.
That access and targeting are driving rapid growth. According to a fall 2023 report from Live Ramp, retail media ad spend has more than doubled in the last three years, increasing from $20.91 billion in 2020 to $45.38 billion in 2023. That amount is expected to more than double by 2027, up to $107 billion, the report found.
Who Does Retail Media Advertising Work For?
Retail media advertising has been considered a key tactic for B2C brands, but it can be successful for B2B brands as well. For example, retailers like Office Depot cater to business customers who shop online to order products or services for their day-to-day operations.
B2B brands can also benefit from retail media advertising by increasing their brand awareness, driving purchases among business customers, and generating leads.
A Retail Media Success Story: 275% Return on Ad Spend
At Brunner, we’re helping B2C and B2B brands use retail media to drive purchases and ultimately grow their business.
For example, we’ve worked with a client in the consumer health and personal care industry to steadily increase their retail media spend over the past year. This client did not have the ability for direct-to-consumer purchasing on their website, making it difficult to measure the impact of media buys on sales.
By using retail media — in this case, Walmart Connect — the Brunner team could easily reach customers across the buying funnel, then measure conversions effectively, using Walmart’s shopper data. This client’s sponsored product campaigns are reaching up to a 275% return on ad spend (ROAS).
What Are the Benefits of Retail Media Advertising?
Retail media can play a key role in an integrated media plan to complement and enhance other media channels. While there are many benefits of retail media networks, two stand out as the biggest reasons to include retail media in your marketing mix.
1. Showcasing Products on Prominent Retailer Platforms
One of the biggest advantages of retail media is giving brands a way to showcase their products and messaging prominently on high-traffic e-commerce websites like amazon.com, walmart.com, and target.com. These retailers get a significant amount of traffic and purchases, every single day, around the world. By advertising on the websites or apps of key retailers, brands can drive incremental sales by putting ads where customers are already shopping. Content that works well on retail media networks often highlights value, including key product or price differentiators, and credibility.
2. Using First-Party Data, not Cookies, to Target Audiences
The continuing move to cookieless marketing is creating a growing need to use first-party consumer data. Retail media networks collect first-party data from consumers who purchase through their marketplaces. This first-party data can then be leveraged for advertising within the retail media network to target prospects and existing customers efficiently.
Using first-party data for targeting provides brands with clear, reliable performance data and insights that can guide future adjustments. The goal is to improve results and drive impact continuously.
What Should Be a Brand’s Goal with Retail Media Ads?
Retail media networks offer various ad formats, including sponsored products, display ads, video ads, and more. These options mean retail media ads can be used to target different customers at different stages of the marketing funnel. Here’s how it works.
- Retail media campaigns can help advertisers build awareness by reaching new customers who — based on their consumer behavior — may not be familiar with what the brand offers.
- Once consumers are familiar, targeted retail media ads can help advertisers influence potential customers who are exploring options and are already interested in what they sell.
- Finally, retail media campaigns can help brands land the sale from customers who are ready to buy, delivering the ultimate marketing goal — driving purchases.
Ready to begin using retail media networks?
At Brunner, we’re experts at delivering results for our clients using a variety of retail media networks, including Amazon Advertising, Google Merchant Center, Target, and Walmart. We proactively seek out and test new and evolving retail media platforms to ensure we’re bringing the best fit to our e-commerce clients. To demonstrate that expertise, our team earns certifications on platforms like Walmart Connect.
If you’re interested in adding retail media to your integrated media plan, let’s talk. We can review key factors like the competitive landscape, budget, network size, audience, and measurement capabilities to choose the right retail media network for your campaigns. We’re happy to chat!
Emily Nobers is an integrated planning manager at Brunner. In her role, Emily develops, implements, and analyzes multi-channel digital marketing plans, including evolving channels like retail media advertising, to help clients reach their full digital marketing potential. With five years of experience, Emily has worked with clients in industries including consumer packaged goods, banking, insurance and education. She has a B.S./B.A in accounting and marketing from Robert Morris University. | LinkedIn
Ivy Ferko is a senior specialist in search engine marketing at Brunner. In her role, she focuses on paid search campaigns for clients in industries including legal services, home supplies, vehicle rental, and consumer packaged goods. She has a degree in marketing from Duquesne University and at Brunner has earned professional certifications on SEM platforms including Google, Microsoft Bing, and Amazon. | LinkedIn