How retail media networks are bringing brands closer to consumers
By Odette van Wyk, Takealot Group Head of Advertising. The growth trajectory for retail media networks over the next few years is anticipated to be astronomical.
By Odette van Wyk, Takealot Group Head: Advertising. Onsite performance-based advertising has proved itself a game-changing strategy for retailers looking to drive sales of branded goods sold on their platform. A retail media network is a media offering where a retailer sells advertising space on their onsite channels, and facilitates off-platform advertising, giving third-party sellers and brands the opportunity to advertise to consumers in a walled garden.
The growth trajectory for retail media networks over the next few years is anticipated to be astronomical. According to McKinsey’s projections, RMNs are set to double the share of advertising spend they attract from the current $45 billion in the United States to more than $100 billion by 2026. But the most significant observation from these numbers is the impending paradigm shift in digital advertising – one that hasn’t been seen since the initial rise of programmatic.
Total media spend
It’s clear that RMN’s are no longer just peripheral players – they’re poised to become a central consideration in marketing strategies and the allocation of advertising budgets. McKinsey is already forecasting that RMN’s could account for 10% to 15% of total media spend for brands as the realisation dawns that targeting shoppers with advertising nearer to the point of purchase yields significant conversions. It’s about reaching online consumers and serving them what they’re interested in while they’re in shopping mode.
The success of retail media networks lies in their ability to effectively curate the customer journey, allowing brands to benefit from the ‘shopping mode’ mindset when customers login to an ecommerce site or app. RMN’s have offerings throughout the funnel from awareness all the way to conversion assets. The approach not only supports marketers with elevated insights, but also attribution analytics to optimise return on ad spend (ROAS), while streamlining and enhancing the customer journey.
But what does it take to be a frontrunner as a retail media network? Firstly, performance marketing needs to remain the pacesetter that gives marketers the platform and tools to advertise at the right moment, in the right product category, to the right consumer. This allows RMNs to offer products directly to shoppers when they are adjacent to the moment of truth, which occurs when they’re looking for something specific, or open to buying something suggested to them.
A second reason for the adoption of advertising on these ecommerce platforms sits in the granular insights provided by RMNs, giving advertisers a view of campaign performance at a deeper level. This active data-driven approach makes every aspect of the customer’s journey clear – from clicks to conversions to attributed revenue – by facilitating the nuanced calibration of keyword strategies, targeting, and campaign effectiveness.
The evolution of on-site performance marketing is developing further with the integration of sponsored display and video to follow. A platform that not only offers visual references in search listings, provides retailers with a holistic understanding of customer interactions, from the awareness stage to conversion but also fine-grained audience targeting and deep post-campaign insights. Moreover, as the digital advertising landscape faces the challenge of a cookie-less future, RMNs are stepping in to offer innovative solutions, including clean room environments that facilitate secure data collaboration and audience analysis.
Above all, retail media gives entire marketing teams a grasp on the marketing continuum in real time. This makes it an exciting time to be a marketer because as these networks of innovation continue to develop next level efficiencies for the industry, performance marketing will live up to its name: with performance that’s actualised.
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