Your Guide to Understanding Retail Media Networks & Their Place in Your Marketing Mix
Introduction
In the past few years, retailers have been capitalizing on the high-growth, high-margin retail media sector to strategically fund initiatives that enhance their priorities and competitive edge. These efforts are not limited to just Amazon and Walmart – many retail titans have been taking these steps forward, including Target and The Home Depot.
Many consumer packaged goods (CPG) companies, including both manufacturers and primary distributors of widely sold products, recognize this moment of continued transformation and rapid growth but remain confused about how best to integrate retail media network advertising into their marketing mix.
We developed this guide to cut through the noise and help you learn more about where to focus and help your brand effectively position itself to grow its retail media business.
Retail Media Networks: What they are & Why it matters
Retail Media Networks (RMNs) are platforms established by retailers that enable brands to advertise directly to consumers within the retailer’s ecosystem. These networks utilize the retailer’s customer data and digital properties, such as websites and mobile apps, to deliver targeted advertisements. By leveraging this data, RMNs can provide personalized product recommendations and promotions to shoppers, enhancing their overall shopping experience.
The significance of RMNs lies in their ability to disrupt traditional digital advertising models. By offering brands a direct line to consumers at the point of purchase, RMNs can drive higher engagement and conversion rates. For retailers, this means increased profitability and a stronger competitive position.
What You Should Focus On
Given the growth of online marketplaces by behemoths like Amazon and Walmart, the retail sector has experienced a seismic shift. Marketers know the days of hoping customers stumble upon your product in a crowded brick-and-mortar store are long gone. Consumers spend more time on the digital shelf of the big players, and the competition for your brand in that space is fierce.
Some of the largest RMNs include large general merchandise retailers like Amazon, Walmart, Target and home improvement giant, The Home Depot, as well as more specialized retailers like Best Buy (electronics), Chewy (pet supplies), Kroger (grocery) and Ulta (beauty supplies).1 However, as the sector grows other smaller RMNs are rapidly growing, and niche players are in the market as well.
How can you stand out? One of the best bets for your brand is to leverage the power of sponsored ads and learn how best to approach integrating RMN placement in your strategic plans.
Why Sponsored Ads Reign Supreme
Sponsored ads are the targeted product placements of the digital age. Within retail media marketplaces, these ads allow you to strategically position your offerings in front of a highly relevant audience. Here is why optimized sponsored ads are essential for success:
- Essential Exposure: Millions of products vie for attention on Amazon and Walmart. Sponsored ads propel your product to the top of search results or onto prominent display placements, ensuring shoppers see it when they are actively searching for similar items and are most receptive to your product offering.
- Targeted Reach: It’s not enough to focus on traditional reach that prioritizes sheer volume over precision. Sponsored ads empower you to target specific demographics, interests, and even past purchase behaviors. This laser focus ensures your ad reaches the customers most likely to convert.
- Measurable Results: Unlike traditional advertising, sponsored ads provide a wealth of data and insights. You can track clicks, conversions, and return on ad spend (ROAS), allowing you to refine your campaigns for maximum efficiency.
- Competitive Edge: In a saturated marketplace, differentiation is key. Optimized sponsored ads allow you to showcase unique product features and highlight competitive advantages, swaying shoppers in your favor.
Optimizing for Success: It’s All in the Details
While sponsored ads offer immense potential, simply launching a campaign isn’t enough. To truly reap the benefits, focus on optimization rather than just launching a campaign. Start with thorough keyword research to identify the terms shoppers use to find products like yours and integrate these keywords strategically into your ad copy to ensure relevant placements. Craft concise and captivating ad copy that highlights key product features, benefits, and any exclusive offers to entice clicks. High-quality images and videos are crucial in the digital world, so use professional media to showcase your products effectively.
Your bidding strategy should align with your budget and goals, so experiment with different options to find the optimal balance between cost and ad visibility. Regular monitoring is vital; avoid a “set it and forget it” approach. Continuously analyze campaign performance, refine your strategy, and A/B test different ad variations, keywords, and bids to identify the most effective combinations. By paying attention to these details, you can maximize the success of your sponsored ad campaigns.
Embrace the Power of Optimization
The world of retail media marketplaces is dynamic and ever evolving. By embracing optimized sponsored ads, brands can carve out or retain a winning position and connect meaningfully with their target audience. Remember, it’s not just about getting your product seen; it’s about presenting it in the most compelling light possible to drive conversions and build brand loyalty. Re-evaluate your strategy to include sponsored ads and consider which, or both, of the two largest RMNs might align with your goals. By following the guidelines above, you can test the power of optimization in the digital aisles of Amazon, Walmart, and beyond.
Keep the Customer Journey in Mind
Even with the strong potential of RMN-optimized sponsored ads, it is imperative to consider the overall customer journey. As the challenge of targeting audiences and optimizing paid ad budgets continues to increase, marketers must think holistically about customers’ and prospects’ total journey through the buying process. Additionally, marketers need to be clear about audience definition and data sources.
Understand the Entire Picture
Are you going beyond performance data and lookalike audiences? It’s essential to consider whether you target shoppers with the right message based on their behavior at every stage of the journey, from awareness to after-purchase retention.
For too long, agencies, retailers, and manufacturers have been treating channels as separate entities. There is a lot of buzz about the holistic consumer experience, but how do you actually support it? Building an effective strategy requires more than just a unified message across platforms; it means having a well-developed response ready to guide each shopper to the next stage of their journey, regardless of where or when they are on the journey.
For example, do you have a plan that addresses the college graduate and mother of two, who watches Hulu, then uses Amazon reviews for research, and, ultimately, purchases on Walmart’s shopping app? How are you targeting this cohort, and are you differentiating both targeting and messaging to maximize your visibility? It’s key to focus on the people shopping in commerce, rather than solely on the channels where placements are available.
Question the Questions You’re Asking
While we all recognize that insights are only as valuable as they are actionable, it is crucial to understand how to apply data to the correct pressure points in the hyper-competitive retail media landscape.
Information strategy through data clean rooms and cross-channel targeting/audiences has grown tremendously over the past five years. Players in retail media must embrace data in an organized and actionable approach.
Amazon Marketing Cloud (AMC) serves two core purposes: providing actionable insights and enabling proprietary audience procurement using first-party data. AI-accelerated and experience-vetted connections now offer strategies a faster leading edge than ever before. With democratized access to its data and insights, AMC is now empowering a wider range of users to leverage its data, bringing better strategy and execution to the table.
We challenge you to question the questions you’re asking: What value do they bring? Are there better questions to ask? Are there simpler alternatives that can yield the same results?
To effectively navigate the competitive retail media landscape, marketers must adopt a holistic approach that considers the entire customer journey, leverages actionable data insights, and continuously questions and refines strategies, including targeting the right audiences with the right messages at every stage, optimizing and adapting to the path to purchase, capitalizing on tentpoles, and so much more.
Don’t Wander the Aisles Alone- Partner with the Right Digital Agency
In the rapidly evolving landscape of retail media, data-driven insights and optimized media are the keys to success. Brands must move beyond stockpiling data and focus on actionable insights that drive meaningful connections with their target audience. Whether it’s Amazon, Walmart, or other marketplaces, the power of optimization lies in understanding the entire customer journey, asking the right questions, and leveraging AI-accelerated strategies.
Remember, it’s not just about getting your product seen; it’s about presenting it in the most compelling light possible to drive conversions and build brand loyalty.
You don’t have to tackle it all alone – partnering with an agency like Acronym can help you best shape your strategy. We will assist you in embracing the challenge and refining your approach to see your brand flourish in the digital aisles of the future. Contact us today.
Sources:
