Moving into 2023, the Retail Media Networks trend will continue to expand, not just impacting retailers, but the entire marketing industry ecosystem.
Keeping up with trends is crucial for any modern marketer as it allows you to stay competitive and keep up with the latest in marketing best practices, strategies, and technology. Keeping up with marketing trends requires research, networking, getting involved in your industry, observing competitors, and having the right partners by your side.
This is the third article of CvE’s 2023 Marketing Trends, following Robert Webster’s 2023 Top Predictions for the New Marketing Era and Marketing Effectiveness Measurement, Data Strategy and Adtech Trends 2023.
At CvE, we firmly believe the Retail Media trend will continue to expand, not just impacting retailers, but the entire marketing industry ecosystem moving into 2023. It’s not complicated to comprehend the macro trends impacting it (whether bricks and mortar, e-commerce or DTC); the pandemic has accelerated the shift towards online sales and along with that has come squeezed margins for retailers and increased pressure on physical store estate.
Retail Media Networks will Drive New Advertising Ecosystems
The impact of Retail media networks growth goes far beyond retail as many brands realise that in a data-first world being able to maximise the value of that data is vital and that their new customers are other brands’ current customers. So, expect to see data-rich advertisers in all sectors start to act like publishers and turn the investment they have put into data infrastructure into revenue and company growth. Such an asset particularly in tough economic times.
Robert Webster, VP Strategy
Publishers and Retailers taking greater ownership and control of their first-party data.
External and internal market forces continue to pressure organisations to provide more transparency, control, and choice regarding how their customers and prospects data is handled. Historic issues arising from the careless broadcast of user IDs’ (pseudonymous or otherwise) through the buying and selling ecosystems have resulted in continued restrictions of cross-site tracking IDs. With this challenge comes opportunity and value potential for publishers to build improved monetisation opportunities through strengthened partnerships with brands. This will be achieved by those that are taking better ownership, management and control of their own customer data.
Jos Pamboris, Director of Technical Consulting
FMCGs to invest in their own capability to navigate Retail Media Networks
With the inexorable growth in the number of retail media networks, brands (and more acutely FMCGs) will increase investment in these areas. The prospect of reaching audiences in data-powered and privacy-compliant environments is an obvious route to better ROI.
For most brands, scale is king. And whereas in the US there is a multitude of large-scale retail media networks, in the UK there are fewer RMNs that can make a discernible impact on a brand’s bottom line.
But the question remains – where should an advertiser spend their retail media budgets? This is currently the biggest challenge facing brands embarking on retail media investments. And there is no easy answer.
Investing in retail media channels is a different art and science to the tried and tested search/social and programmatic. Every retail media network has its own tech, its own structures, commercials, audiences, formats and measurements. There is no one size fits all making comparisons difficult, meaning that navigating this space is complex, requiring specific expertise.
Currently, that expertise and know-how does not reside inside the network agencies. It is better found in agile and nimble consultancies that can work both strategically and get into the nuts and bolts of every aspect of a retail media network. Through these collaborations, brands will have a strategic partner that supports them in developing their own internal operations and capabilities that future proofs their ability to maximise the retail media opportunity over the long term.
Athar Naser, Global Director, Marketing Transformation Consultant
AdTech Intermediaries Facing Multiple Headwinds
Brands and marketers will need to prepare for this marketing trend in 2023 as it will ultimately affect how they deliver their media to outside partners, how they set up the CDPs- customer data platforms, work with clean rooms, and ultimately how they measure the effectiveness of their campaigns going forward. Brands can benefit via more targeted partnerships and insight from those publishers who can provide a greater understanding of the target market.
Those publishers with niche audiences broadcasting their IDs to the bidders are giving the demand side the profiling tools to go and find these audiences elsewhere, and publishers with valuable content are wising up to this fact. Not unlike the value that many retailers see in their own datasets to build retail media networks, publishers with valuable data are seeing the opportunity to cut-out the middleman and either protect their data through semi-walled gardens or remove Adtech intermediaries providing no value from the path.
In addition, where there is a lack of ID based capability to share with demand-side, publishers will strengthen their capability to provide audience-based signals. Taking this audience-centric approach should not necessarily be to the detriment of Advertisers.
Much like with the retail media network space, successful publishers are trending towards monetisation where the focus is less-so on a direct action or tenuous link between chasing those who are going to convert anyway. Last-click attribution is a major cause of this counter-productive measure of performance. Media buying with less focus on ID-based measures of success are more-so driving attention alongside the quality of the adjacent content. From an optimistic viewpoint, we need to see this change to bring more brand spend into digital, which has historically skewed towards DR thanks largely to the third-party cookie.
In the short term, it is likely that monetisation and yield will be detrimentally impacted as the demand-side adjusts to the changes, but in the longer-term, publishers will see the benefits. Many sites are currently built and designed for the ad placement rather than the content, further diminishing the quality of content from the users- with these trends in place we will see a smaller number of higher quality ads and formats that will not be to the detriment of the user experience.
There are other benefits too. Publishers can minimise risk of data leakage, reduce bandwidth from calls to multitudes of AdTech providers, and provide privacy as a competitive advantage through respecting their own users. The users are after all the most important asset here, and often given an unclear value exchange between content viewed, and understanding of how their data is being used, leading to distrust.
The privacy groundswell shows no signs of stopping (even with delays Google’s decision to delay or modify some of their initially proposed changes), and so those advertisers and publishers who prepare for these changes will gain the most long-term success.
The idea of building publisher and retail media network walled (or semi-walled) gardens, is of course not a new concept, but the trend is beginning to take root amongst a greater number of retailers and publishers. The cookieless era is still taking some time to actually materialise, but as content-owners are building out their understanding of the longer-term view that cross-site tracking is going to erode in scale, they can see that the one vision that will likely stand the test of time, and that is that data you own, control and can manage will become more valuable that any data that is owned or pseudo-owned by others. Publishers with valuable content will start to better value it and protect it in future.
The erosion of cross-site tracking will continue well beyond the death of the third-party cookie, and with each change comes opportunity for both publishers and advertisers to reset and rebuild how they plan, buy, optimise and measure the effectiveness of their media campaigns going forward.
Jos Pamboris, Director of Technical Consulting
Conclusion
Retail Media is growing FAST and Europe will follow the US gold rush. Retail Media Buying requires distinct skillsets – Growth Marketing, Clean Rooms, Data Connectivity, Incrementality. This trend heavily favours brands able to build in house digital capability – data, measurement, proximity to e-commerce
With the inexorable growth in the number of retail media networks, brands (and more acutely FMCGs) will increase investment in retail media channels. This is a different art and science to the tried and tested search/social and programmatic. Every retail media network has its own tech, structures, commercials, audiences, formats and measurements. There is no one size fits all, meaning that navigating this space is complex and requires specific expertise. That expertise does not reside in network agencies, but in agile and nimble consultancies that can work both strategically and get into the nuts and bolts of every aspect of Retail Media Networks.
Building publisher and retail media network walled (or semi-walled) gardens is a trend beginning to take root amongst a greater number of retailers and publishers. The cookieless era is taking time to materialise. But, content owners are building out their understanding of the longer-term view that cross-site tracking is going to erode in scale, and they can see that will likely stand the test of time. The data they own, control and manage will become more valuable that any data that is owned or pseudo-owned by others. Publishers with valuable content will start to better value it and protect it in future. The erosion of cross-site tracking will continue well beyond the death of the third-party cookie, and with each change comes opportunity for both publishers and advertisers to reset and rebuild how they plan, buy, optimise and measure the effectiveness of their media campaigns going forward.
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