In a world without cookies, yet a growing need for personalised advertising, how can retailers and retail brands alike harness retail audiences?

Retail media has been growing for over a decade, and its potential is finally being recognised across the globe, with hugely profitable ad business from commerce behemoths such as Amazon and Alibaba, nimble local entrants such as Boots, as well as the surge in e-commerce over the pandemic highlighting exactly why retailers should be taking an interest in the sector.

So how do we make the most of the opportunities presented by retail media? What is the roadmap for capitalising on retail media on a regional and national basis? To answer the latter, ExchangeWire’s “Where the Action is: Harnessing the Power of Retail Media” panel at ATS Madrid 2022 investigated how retail media has become established, the potential of the channel, and how market participants in Spain are viewing the medium.

The panel started by discussing the state of retail media as it is, and what’s driving it. Data was at the heart of the discussion, with Rafael Martinez, director of business development, addressability Spain, LiveRamp, describing data as a key factor in the growth of retail media. “Data is the engine that launched retail media. It’s been the facilitator and enabler.” He continued: “There’s a clear upward trend here - brands need to start redefining their strategies.”

Juan Sancho Cubino, head of Carrefour Links, Carrefour Spain, agreed, seeing the mutual benefits of retail media for both brands and their customers: “It makes a lot of sense for shoppers, and allows brands a deeper analysis of consumer needs.”

So where does retail media fit in with current strategies? Martinez sees it as part of a wider outlook: “When we talk about solutions, I think omnichannel is everything.” A key strength of retail media is the demonstrable value exchange for consumers in terms of loyalty card deals and shopper discounts. Therefore customers are more open to sharing their data here than they are in “traditional” display channels, giving it a haven status among the mire of identifier deprecation and privacy legislation. However, the market must maintain robust standards in how this data is applied on an omnichannel basis, to avoid denigrating the trust consumers hold in retail media.

While discussing the growing trend in retail media. Fernando Siles, head of online marketing, Worten, covered some interesting aspects of global ad spend: “In China, 25% of all advertising is consumed on Alibaba, Amazon has USD$31bn (£25bn) in digital advertising sales.” To bring Amazon’s figures into stark contrast, that represents a larger percentage of their revenue than their subscription services, including Prime.

However, it is important to caveat Amazon’s growth with the notion that market fragmentation across Europe, increasing distrust towards big tech platforms, and the establishment of vertical and regional powerhouses akin to the Shopees and Lazada Groups of APAC, are all indicators that the strongest growth in retail media lies outside of the incumbent behemoths. Few offer the scale to match big tech operators, hence partnerships between retailers and independent technology providers will be the kindling to the future growth blaze. Carrefour for instance has linked arms with Criteo, Google, and LiveRamp for its Carrefour Links platform, while technology e-commerce site PcComponentes has joined forces with CitrusAd.

Continuing to discuss Jeff Bezos’s company’s ad sales, Siles estimated the retail monolith to account for 10% of Spain’s ad spend. When discussing Amazon’s ad sales, he continued “Amazon don’t want us to know the extent of the ‘iceberg’ - they report them in a category called ‘others’!”.

While Amazon’s ad sales figures may be hidden, communication is a key tenet to the future of retail media. Cubino sees the industry’s ability to highlight the benefits of retail media to brands as one of the key issues in the coming months: “We need to organise ourselves as an industry to improve visibility.”

Commenting subsequently to the panel, Babs Kehinde, senior director of publisher development at PubMatic, echoes the need for cross-industry collaboration, “We know that retail media is a complex area and one that will continue to evolve. It is vital that the industry comes together as a whole and defines what success looks like and how to get there in a standardised way. If every retailer builds their own solution, there will be no standardisation and media planners will be swamped with disparate data which we know is a recipe for disaster. Retail media also needs to be integrated within today’s supply-side platforms (SSPs) and demand-side platforms (DSPs) to enable media buyers to orchestrate optimal ad spending across all channels.”

All the panelists agreed on the importance of retail media going forward. Martinez discussed the incredible growth in retail media: “The evolution has been unparalleled…brands are betting on retail media”. Cubino echoed that sentiment: “There’s a huge opportunity here. It’s going to become compulsory for e-commerce.”

While wrapping up the panel, moderator Salvatore Cospito, partner, Programmatic Spain, asked the contributors to describe the challenges facing retail media. As the panel discussed, Siles summarised nicely, defining “measurement, inventory and communication” as the steps that retail media companies need to consider to take advantage of the obvious demand in the marketplace.

ATS Madrid panel discussions took place in Spanish - quotes reported via translation.