If you have ever looked into putting some of your products online, you might be wondering what a retail media network is.
A retail media network is when a retailer sets up an advertising platform on a digital network. This means that a brand can advertise on a retailer’s website. For example, this allows Oreo’s to place an advertisement on Walmart’s website.
Using a retailer network has several advantages and disadvantages. This is why it is important that you learn as much as possible about retailer networks to see if they are the right fit for you. Additionally, it is important to know how to use retailer ads to see if it is something you might be interested in adding to your advertising campaign.
Why Has the Use of Retail Media Networks Increased?
You might be wondering why the use of retail media networks has increased dramatically recently. After all, until recently the only large retailer to utilize retailer networks for advertising was Amazon. So why have many large retailers started to join Amazon in this strategy?
One of the biggest reasons is due to the increase in online shopping caused by Covid-19. Many large retailers have had to change the way they operated during the Covid-19 pandemic. With more consumers purchasing products online, this was a great advertising opportunity for retailers to take advantage of. Consumers increased their online shopping so much during the Covid-19 pandemic that global digital sales grew 45% in 2020.
Even beyond the impact of Covid-19 has had on the online retail industry, online shopping has been increasing for years. Not only has it been increasing, but it shows no signs of stopping. As of right now, retail media networks seem to be the way of the future.
Advantages to Using Retail Media Networks
There are several advantages for advertisers to use retail media networks to advertise on. By purchasing retailer ads, the advertiser has the opportunity to advertise to consumers when they are already about to check out. If a consumer went to a website for a certain product, they might be encouraged to also pick up your product before they check out. It is the virtual equivalent of putting chips and candy by the check out in the grocery store.
Additionally, advertising on a retail media network also allows you to see the data collected by the retailer. The retailer is already collecting information on any users who visit their site by using cookies. This data provides you insight into what types of customers are purchasing your product. This can help you better determine which products you should position yours by for the most amount of sales. For example, if you are a peanut butter company and you notice that a lot of consumers are also buying jelly with your product, you will know that you should advertise next to the jelly.
Disadvantages to Using Retail Media Networks
Like any other advertising strategy, there are also disadvantages to using retail media networks. Although there are more advantages than disadvantages to buying an advertisement on a retailer network, it is still important to note the disadvantages.
The biggest disadvantage to purchasing advertisements on retail media networks is that it is often difficult for smaller businesses to compete with large companies. Since large companies typically have a much larger advertising budget, they are able to outbid small brands. It is not impossible for small businesses to utilize retailer advertising, however they are in for a much more difficult time.
Another disadvantage is that many retailers do not offer retailer advertising yet. Since using retail media networks is a relatively new idea, many major retailers have yet to implement the idea. This could obviously increase over time, but for now, there is not a ton of major retailers that currently offer retailer advertising. Some major retailers that do utilize retail media networks include Walmart, Target, and Kroger.
How to Purchase an Advertisement on a Retail Media Network
The retailers that run the retail media networks try to make it as easy as possible to purchase advertisements. If your product is already sold at the retailer, all you will need to do is go to the retailer’s website and purchase an advertisement.
If it is your first time purchasing an advertisement from a media network then the retailer will target consumers for you. The retailer does this by using all the first and third-party data it collects from the consumers that visit their website. The retailer will recommend the product you are advertising to consumers that their algorithms have determined will be likely to purchase your promoted product.
If this is not your first time advertising with the retailer, then you can actually choose who you want to target. This is because you have already seen the retailer’s data they were able to collect on the advertisements you ran through their website.
Do Retail Media Networks Benefit Consumers?
So retailer networks are very effective for advertisers, but does it provide any benefits for consumers? Many consumers might be hesitant about trusting retailer advertising because it involves keeping track of the consumer’s data. Although this may seem invasive, the data is collected through cookies, which many websites use. Additionally, that data is only used to predict overall trends of what products consumers purchase in relation to other products. A user’s individual data is never singled out, it is only used to predict larger trends.
Surprisingly, having advertisements on retailer networks can actually prevent price increases. If retailers have another form of income from the advertisements, they will not have to make up the income by increasing the prices of products. Although seeing an advertisement might be slightly annoying to consumers, it could end up saving them a lot of money in the future. After all, the advertisements on retailer networks are usually seamlessly implemented. The average consumer might not even notice much of a difference.
How Retail Media Networks Benefit Retailers
Obviously, the retailers themselves also significantly benefit from using media networks. The media networks provide the retailers with a different form of revenue. This extra revenue ensures that the retailers do not have to increase the price of their products. You may think this only benefits the consumer, but it also benefits the retailer. Since the retailer does not have to raise its prices, they will have lower prices than their competition. This will attract more customers to their store, raising revenue for the retailer. This is especially true for grocery retailers since the goal of many grocery stores is to get the consumer in the doors. The idea is that once the consumer is in the doors, they will find other products that they need.
Even if using retail media networks only allows retailers to keep the price of certain products down, this will still benefit the retailers. The customers will likely also purchase other products that have a lower price.
How to Set Up Your Own Media Network
Now that you have heard all the benefits retailers have, you might be interested in how you can set up your own media network. Luckily, there are advertising platforms that specialize in providing retail media networks for companies. Companies like Criteo, Promote IQ, and Elevaate all offer services that allow you to create your own media network. So which one should you choose? Well, it depends on what you want to get out of your media network. Each service offers slightly different options at different price points.
Criteo is probably the most well-known out of these companies. It gives the retailer control over their campaigns and provides them analytics to improve their campaigns. Criteo allows retailers the chance to choose which brands they want to work with. Criteo starts at $1.00 dollar a month using a subscription model. Additionally, there is a free trial available for new retailers.
Promote IQ focuses on seamlessly adding the media network into the retailer’s website. This is convenient for retailers that do not want to build a new website. Promote IQ has services that can give you advice on how to improve your campaign if you are struggling. Another aspect Promote IQ focuses on is creating hyper-targeted ads for consumers. Promote IQ does not have a set price. You have to get in contact for more pricing information.
Finally, Elevaate focuses more on making the experience as easy as possible for retailers. Their platform is designed to be easy to set up and effective at generating revenue. Using Elevaate allows retailers to maximize their profits without compromising the consumer’s experience. Elevaate focuses more on increasing profits than the other platforms. Elevaate does not have a set price like Promote IQ.
FAQs about What is a Retail Media Network?:
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