What does retail media need to do next?

by John Still on 24th Oct 2024 in News

Retail media has been a hot topic for the last year. But what does it need to do to hit the next level? The industry gives their thoughts.

Brands and retailers are leveraging retail media to reach consumers at critical buying moments. As the sector grows, it faces new challenges in scaling, measurement, and integrating omnichannel strategies. What innovations and strategies should retail media adopt next to maintain its momentum and meet the evolving demands of advertisers? From improving first-party data usage to optimizing ad formats and fostering transparency, the ad tech industry must play a pivotal role in shaping the future. We ask experts: What should retail media prioritise to stay competitive and deliver value?

What the industry thinks

"With on-site inventory limited, a good strategy to grow retail media is through expanding to off-site channels. This is because off-site inventory allows retailers to extend their advertising reach, while still utilising valuable first-party data for targeting. Another way is standardising measurement and defining the right KPIs; critical steps to helping agencies and brands measure performance effectively, allowing for better optimisation and increased advertiser spend allocated to retail media. Finally, bringing programmatic demand from standard DSPs through deals helps retailers meet their goals without relying solely on their internal sales house teams.

Moving forward, a significant opportunity for retail media is the convergence with Connected TV. With the increasing shift to streaming, integrating retail ads into CTV offers a unique opportunity to enhance targeting capabilities.

Ultimately, retailers that provide advertisers with transparent, measurable, and cross-platform performance data will be better positioned to compete with walled gardens, like Amazon, and drive greater brand investment."

Lucie Laurendon, Head of Product Marketing at Equativ

"Retail media's next big leap is to unlock its powerful data for broader use. To grow, retailers must make audience insights, campaign performance, and measurement turnkey, ensuring real-time optimisation. By simplifying access to data, more marketers – including smaller brands – can activate it effectively. That said, the true opportunity lies in leveraging retail data to train AI models aimed at maximising campaign performance at scale and in an efficient manner. Enhanced identity solutions will allow retailers to compete with walled gardens, increasing addressability and performance across diverse channels."

Michael Guzewicz, Vice President, Strategic Partnerships at OpenX

“Retail media continues to be a lightning rod for ad spend. Expected to overtake Linear TV in global spend by 2025, recent figures released by IAB Europe found that 50% of regional buyers are already partnered with a retail media network.

“If retailers want to capitalise on these shifting budgets and compete with the walled gardens, they must focus on differentiating their advertising tech stack. This includes implementing more profitable products, like self-service features, improved reporting, better control, and real-time optimisation options.

“Above all, retailers need to connect partners with their customers through their entire buying journey. This requires sophisticated, multi-environment enabled ID solutions that seamlessly integrate across channels, including on-site and off-site display, sponsored product listings, in-store screens, email, social media, and Connected TV. Providing a consistent customer experience and a comprehensive view of consumer behaviours for game-changing omnichannel ad strategies.”

Jakob Bak, SVP and Co-founder, Adform

"Retail Media has become an indispensable channel for brands seeking to reach consumers at key decision-making moments. The rapid expansion of Retail Media Networks, both online and in-store, reflects the growing significance of advertising within retail environments. However, despite its rapid growth (22.1% in 2023 vs. 6.1% total ad market growth), Retail Media suffers from a fragmented ecosystem that lacks cohesive standards. A gap that is particularly problematic for media buyers, who are trying to navigate inconsistencies, and invest confidently in this channel.

The faster the industry can adopt standardised approaches to measurement, ad formats, and reporting, the quicker both brands and retailers can unlock new advertising opportunities. IAB Europe has worked with the buy- and sell-side to develop online and in-store measurement standards to address this problem."

Marie-Clare Puffett, Industry Developments and Insights Director, IAB Europe

"Retail media is experiencing exponential growth and will become even more data-driven and integrated into the broader advertising landscape. To compete with walled gardens and sustain momentum, retail media must focus on two key areas.

First, collaboration with media agencies and advertisers is vital. Retailers should enhance their technology to scale demand and simplify access to audiences and inventory, similar to programmatic advertising. This streamlining, along with robust measurement tools, will enable advertisers to make smarter, data-driven decisions.

Second, retail media must embrace an omnichannel approach. By integrating digital, in-store, mobile, and Connected TV (CTV) advertising, retailers can create a seamless customer experience. Aligning in-store displays with online data can ensure consistent messaging across all touchpoints, helping brands connect more meaningfully with their audiences."

Ollie Walls, Director of Commerce Media at PubMatic

"'Retail media' has been around for decades, traditionally separating out-of-store, above-the-line advertising and in-store shopper marketing budgets. But in today’s retail landscape, combining real-world consumer data with online digital behaviours is crucial for effective advertising.

Retail media is not just about placing ads on digital platforms — it’s about creating seamless experiences that connect the dots between what people do online and how they act and travel to be in-store. A ‘customer journey’ should be both real-life movement and online experience to understand the route from ‘sofa to store' and the media touchpoints on that route - TV, audio, mobile, and OOH."

Nigel Clarkson, CRO at Taptap Digital

"The next frontier for retail media to really supercharge its growth is expanding offsite. Already, many publishers are eyeing up retail media collaborations as a new revenue stream, while for advertisers these partnerships combine the reliability and safety of retail media networks with the reach of the open web.

Really good contextual engines and curation will be the difference makers for this approach. This goes beyond just partnering with premium publishers, instead dividing individual web pages into categories thanks to AI-powered semantic analysis tools, to find people to engage with at key selling points. It's a win-win for all parties, enabling precision targeting at scale without cookies."

Fiona Salmon, Managing Director, Mantis

"With data only becoming more of a premium, Retail media’s true opportunity lies in the data that it makes available to advertisers. This treasure trove of insights allows marketers to better build up a picture of shopper sentiment and habits in a privacy-secure fashion. As we approach the ever-important holiday shopping period, being able to access these insights will be more important than before. With only 14% of shoppers planning to spend on the key sales days of Black Friday and Boxing day, retail media could hold the key to delivering highly targeted messaging to shoppers at the right time for maximum impact.

The next step will be integrating commerce media into wider marketing strategies and understanding the broader total impact of each commerce media advertising campaign through better measurement, not just limited to the sales lift in that retailer. The trend of networks partnering with publishers is one way to bring the benefits of commerce media to the open web, this should help advertisers reach more effective scale."

Stephen Upstone, CEO & Founder, LoopMe

"Strong collaboration is key for retail media growth. For internal teams, this requires a focus on closing gaps between departments in retail organisations. We’ll see retail media teams working more closely with trade and merchandising teams, with a Joint Business Plan empowering alignment on shared goals and investments. Externally, collaboration between retailers and brands will enable precise targeting and personalisation, resulting in consumer engagement closer to the point of sale than ever before.

Retailers have a unique advantage over walled gardens, as they own the “checkout moment” and first-party data. To compete, they must prioritise building retail media networks that unify planning, delivery and reporting across channels. By delivering real-time insights and closed-loop attribution, retailers can offer brands the transparency and performance metrics they can’t get elsewhere. The key is strong partnerships and providing advertisers with SKU-level reporting and actionable data - areas where walled gardens typically fall short."

Troy Townsend, Co-Founder & CEO, Zitcha

"For Retail Media to grow, retailers and brands must develop strategic partnerships rather than purely transactional relationships. This can only be achieved through data collaboration for insights, planning, activation, and measurement, which will drive greater efficiency in both cooperation and competition with walled gardens. By focusing on harnessing first-party data for targeting and insights and adopting an omnichannel approach, brands using retail media can better personalise experiences across the consumer journey. The ‘Audience as a Service’ concept also provides a unique value proposition by leveraging insights from offline and online behaviours.

However, although there is a mindset shift amongst media planners regarding Retail Media to shift from a lower funnel to a through funnel approach, the proximity to the transaction continues to make measurement the most compelling proposition that Retail Media offers. For this to be realised, two things need to occur: strategic partnerships and robust measurement frameworks. When in place, significant investment will be driven, thereby unlocking growth."

Hugh Stevens, Managing Director UK, LiveRamp