As brands recognize the importance of using data-driven marketing strategies to connect with customers, they want to know how to make the most of the retail media network (RMN) phenomenon for targeted digital advertising campaigns.
In this brand strategy guide, learn why you should add retail media networks to your media mix, the retail media metrics that matter most and the best practices to follow when setting your own RMN strategy.
Whether you’re an advertiser or brand just starting to explore your options, making your way with some experience under your belt or out in front confidently striding ahead, we’ll give you the information and advice you need to set yourself up for your retail strategy success.
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Table of Contents
- Why Add Retail Media Networks to Your Media Mix?
- What Retail Media Metrics Matter Most
- Retail Media Best Practices To Keep in Mind
- What Retail Media Strategy To Take: Our 3-Tiered Approach
Why Add Retail Media Networks to Your Media Mix?
Retail media networks are surging in popularity. According to Magna, retail media advertising spending will increase by 15% this year to $41 billion. What’s propelling this growth?
Goodway Group Director of Strategy and Planning – Retail Media Networks Astrid Mills explained:
“Retail media networks allow advertisers to fully track conversions and tie actual sales and in-store purchases back to campaign spend, which hasn’t always been the case with digital or traditional media.”
Audience targeting helps you better understand your target audiences and what they care about. For example, you can analyze data from online surveys or social media to determine how to connect with them. Look at what types of content they engage with and reflect that on your paid and organic channels.
Here’s what brands have to gain when they add this important channel to their media plans.
Retailer First-Party Data Access
With the third-party cookie demise on the horizon, first-party data comes at a premium. If you’re an endemic brand (one that has products on a particular RMN), use retailer first-party data to tap into direct customer relationships. The data can help you advertise to a highly targeted audience in a trusted environment and reach consumers who are more likely to be interested in your products at a time when they’re most likely to buy. This could result in higher conversions and a better return on investment (ROI).
If you’re a non-endemic brand (one without products on an RMN), use RMN transaction data to analyze consumer behavior and preferences to find those customers shopping for complementary products.
“Often thought of as only on-site display, RMNs also allow advertisers to utilize shopper first-party data through off-site activities such as CTV, mobile display and digital out-of-home,” Astrid said.
Better Targeting
Find customers no matter where they are on their shopping journeys. Retail media gives you the potential to reach customers up and down the funnel and across a variety of digital and physical locations. Gain valuable insights into how RMN customers search and browse, what products they purchase and what their overall preferences are. These insights can help brands improve their product offerings and create more relevant and targeted campaigns.
Personalized Shopping Experience
Brands can promote their products in a contextual and relevant way, creating a more engaging experience for consumers. Today’s buyers want this. Per a Twilio report of 6,000+ surveyed global consumers, 66% would quit a brand if they don’t have personalized experiences. Also, 86% said that real-time personalization would increase their brand loyalty — thereby increasing their customer lifetime value.
Cross-Selling and Upselling Opportunities
RMNs help you gain more cross-selling and upselling opportunities by targeting customers looking for complementary products or upgrades, which can lead to increased sales and revenue.
Proximity to the Point of Purchase
Engage with customers throughout the consumer journey, especially right before checkout. By reaching users who are in shopping mode and engaging on a retailer’s digital properties (i.e., on a website or app), you can take advantage of key moments so you’re relevant when audiences have the highest propensity to convert.
Measurement
Get real-time insights into campaign performance so you can strategize and improve results. By measuring the effectiveness of your campaigns, you can optimize your spending to improve your ROI.
What Retail Media Metrics Matter Most
A range of retail metrics can help you track campaign success. Which are the most popular?
For U.S. retail media buyers, that would be incremental sales, return on ad spending (ROAS) and ROI.
But what do we think are the most important metrics when it comes to measurement?
Closed-Loop Measurement
Closed-loop measurement is a method of measuring the impact of ads on consumer purchase data (both online and offline actions). Use this methodology to track advertising media campaign performance through the complete purchase funnel. Measure how effective an ad was in generating a sale and see how your media investment connects to what customers actually purchase.
The data can help you know what channels, creatives and publishers are contributing the most to driving sales. It also helps you optimize your media strategy to ensure the highest possible return on your media investment.
This visual shows closed-loop measurement in action:
Incrementality
Incrementality is a method of measuring the impact an action has on outcomes like sales. Measure incrementality to find out how many additional sales can be attributed to retail media ads as opposed to sales that would have happened naturally without the ads.
Incremental Return on Ad Spend (iROAS)
Discover the additional return on investment generated from an advertising campaign above the baseline (that is, above the business’s existing revenue). iROAS considers the incremental revenue generated as a result of the ad campaign so you can optimize your campaigns toward more profitable outcomes.
With closed-loop attribution, incrementality and iROAS, you can gain a better understanding of which retail media tactics have the most significant impact on consumer behavior to tailor your campaigns and ad spend accordingly.
12 Retail Media Best Practices To Keep in Mind
Considering investing in RMNs? Here are some best practices we’d recommend you follow.
1. Evaluate Potential RMN Partners Using Specific Criteria
Retail media networks are popping up left and right, and each is unique. So, before you choose one to work with, make sure that the RMN can:
- Give you access to a large diverse audience.
- Provide first-party data and the right category fit, scale and target audience.
- Explain consumer behavior and trends.
- Share how customers shop and buy.
- Reveal traffic and user engagement.
- Talk about available tactics and costs.
- Tell you about its future plans. (Is the RMN constantly innovating? Offering new features?)
2. Focus On RMN Audiences
Look at each RMN audience to determine where networks overlap. Each network is likely going to have a significant share of voice with its unique customers. Find out how customers are identified: Traceable tender? Loyalty programs? Understand the overall universe size and targeting capabilities, too. How does closed-loop reporting work? Is ecommerce offered?
3. Lean Into RMNs’ Expertise
Have confidence in your RMN partners from a planning standpoint. They know their platform the best and will suggest what works best.
Mallory Becker, Goodway’s senior director, client experience, of retail media networks, had this to say:
“Partnership is key. Trust your RMN partners because they’re the experts on their platforms.”
Share your overall national campaign goals as well — what’s your ideal customer profile?
But don’t just stop there — rely on your RMN insights teams to understand purchase cycles and additional audience segments with basket affinity.
4. Take Advantage of All Available Resources
The right retail media networks will partner with you to work towards the same goals. Use all the partner resources available (which usually is a lot!) such as dashboards, merchandising teams, insights, media buyers and other experts in each field.
5. Know Why RMNs Really Matter
One common RMN misconception is that on-site inventory is their “bread and butter,” but this is almost always a small portion of their overall offerings. The real benefit is that RMNs understand their customers and can target them based on known purchase data.
6. Anticipate a Larger Investment
The value of first-party shopper data often comes with an increased price tag — so be prepared. Costs per mille (CPMs) aren’t going to look like what they do when you’re buying programmatically. Similarly, scale isn’t going to be what you typically see from a programmatic buy.
7. Ask for the Right Data
Get true brand data versus category generic data to be most helpful in creating strategic plans.
8. Identify What Metrics To Track
Which KPIs are most important for your brand? iROAS? Customer acquisition? Overall new product awareness? These metrics require different strategies and are based on brand evolution. Be clear so experts can put together strong plans to accomplish your goals.
When comparing retail media network results against one another, however, beware of the different methodologies used. Unfortunately, it’s never apples-to-apples. RMNs aren’t standardized yet.
“The retail media space is fragmented with many brands working across several retail partners. Goodway can help clients manage the multitude of partners in an ever-changing space.”
9. Remember These Targeting Factors
If debating on national or local targeting, keep in mind where your products are sold, or if you have any distribution constraints.
10. Don’t Use a One-Sizes-Fits-All Approach
As you consider KPIs and national campaign goals, remember that you’re unlikely to see widespread success on an RMN if you’re just lifting a national plan and applying it to an RMN. Each RMN knows its shoppers’ and customers’ habits and media usage and may require a custom approach to reach optimal success.
11. Expect To Be Creative With Your Creative
Just like you can’t lift and apply a plan, you can’t lift and apply national creative to retail media networks. RMNs likely require cobranded assets that meet an established set of guardrails. Lean on your expert RMN creative team and expect feedback rounds to take longer than normal.
12. Know the Limitations
Some RMN capabilities and tactics may be limited. You may not see expandable or high-impact creative, and some networks may not offer connected TV (CTV), digital out-of-home (DOOH) or native units. Be patient and ask questions about what’s on the roadmap if you’re interested in testing or being first to market.
What Retail Media Brand Strategy To Take: Our 3-Tiered Approach
Ready to get started? Follow these steps to be successful.
What To Do First
- Take advantage of your demand-side platform’s (DSP’s) integrations and add retail media networks to your existing media plan.
- Leverage existing audiences or create custom ones with retail partners.
As Bailey explained:
“Humans can be complicated with no singular path to purchase. Leveraging retail media networks within a brand’s programmatic buy can help untangle the web to understand how media is impacting consumer purchases both in-store and online.”
Here are some other tips to use at the beginning of your RMN advertising journey:
- Start small with a test budget so your campaign is easy to measure.
- Be sure to put specific parameters (for instance, frequency of purchase) around your campaign.
- Make sure your campaign flight has enough longevity to optimize.
Astrid had this to add:
“You get sales data every week or two, so if your campaign is only running for two weeks, it’s over by the time you’ve seen what’s happened. That’s why we recommend a six-week flight for every campaign.”
What To Try Next
- Evaluate what worked in your original campaigns and hone in on your customers.
- Look at the power of the data you’re getting back and see how media is influencing in-store purchases. (Maybe it’s what you expected; maybe not.)
- Invest a bit more and keep testing.
- A/B test your promotion creative on a longer flight.
- Consider including a 50% standard search on your media plan to get more bang for your buck.
“If you’re up and running and seeing strong results, think about all sorts of testing opportunities, whether that’s audience, tactic or creative testing,” Mallory said.
What To Do Eventually
- Dive into retail media network on-site advertising and leverage several different partners.
- Consider working with Instacart or similar delivery companies which span multiple different retailers.
- If your brand is a good fit and your results are good, include RMNs on all your media plans.
Get Ready To See Your Sales Revenue Grow
By following the tactics outlined in this guide, choosing the right RMNs for your brand and making the most of your partnerships along the way, you can achieve higher sales revenue — and better ROAS and iROAS — than you may not have been able to if you’d only invested in other types of digital advertising. The key is to be strategic at every step in the process, be selective in who you partner with, track the right metrics, always keep innovating, and view your RMNs as true partners, working towards mutually shared outcomes.
Where To Go From Here With Your Retail Media Network Strategy
With continued growth, increased personalization and greater ecommerce integration, retail media networks are poised to play a significant role in digital advertising’s future. But navigating the ever-evolving retail media network landscape can be overwhelming. That’s why Goodway is here to help you find fresh, innovative ways to reach consumers and drive sales. Contact us today for a free consultation to learn how to maximize your retail media strategy.
Juli Pettijohn is an experienced advertising professional who’s worn a number of hats in the advertising world from editor to writer to project manager. In her current role at Goodway Group, Juli works with internal and external teams to produce compelling case studies, webpages, proposals, press releases, presentations, award submissions, blog posts and other content that help educate readers about adtech topics, amplify our brand and showcase client successes. She has written extensively about different topics including retail media, intent data and ways to prepare for our cookieless future.