Retail media continues to be one of digital advertising’s fastest-growing channels. Projected to account for more than 25% of global ad spend by the end of 2024, 69% of advertisers say they will increase their retail media ad spend, while 61% believe that retail media networks (RMN) perform better than other types of media. In response, nearly all major retailers have established their own RMN to capitalise on the growing interest from advertisers and the potential ad revenue.
This increase in the number of retail media networks has also been driven by the continued growth of online shopping. According to eMarketer, 20.1% of retail purchases are expected to take place online in 2024, rising to 23% by 2027. However, as online retail grows, digital marketers are facing increasing challenges. Traditional online signals, such as third-party cookies, used to reach audiences and measure the success of campaigns are now being restricted, rejected, or concealed, complicating digital planning and buying decisions.
Against this backdrop, retail media offers marketers an alternative: access to a rich stream of authenticated, first-party deterministic consumer data. Through RMNs, advertisers can tap into these first-party sources and gain valuable insights, including consumer purchasing behaviours and preferences. This is combined with the ability to reach audiences at critical moments in the customer journey, including at the point of purchase, for closed-loop measurement.
However, as more and more retailers establish their networks, the RMN marketplace becomes increasingly cluttered and fragmented. So, how can newcomers ensure they are effectively leveraging the channel? What opportunities and obstacles should they be aware of?
Retail media today
DV recently released two reports that include proprietary research on the subject of retail media. The Global Insights and Rise of Retail Media reports highlight key findings advertisers can use to strengthen their retail media measurement strategies.
One key aspect covered in these reports is the structure of retail media campaigns, which generally consist of onsite (i.e. ads on a retailer’s owned and operated properties, such as a website or app) and offsite (where retail media networks leverage their first-party data to extend campaigns outside of their owned inventory into other channels such as open web, social and CTV) ad placements.
At a high level, RMNs represent a promising environment for measurable return on ad spend and campaign performance. However, both onsite and offsite campaigns bring unique challenges when it comes to media quality and performance.
Onsite advertising
Our research found that onsite ad placements perform well compared to traditional media in terms of brand suitability, with violations 10% lower than DV’s overall benchmark. Additionally, ad fraud rates for onsite campaigns were found to be nearly one-third lower than the benchmark, underscoring the reliability of these environments. Onsite retail media inventory was also found to effectively reach shoppers in pages with low ad frequency and strong contextual relevance, with engagement rates 183% higher than DV's Attention baseline.
Though onsite inventory is generally the highest quality, it’s important to note that challenges can occur. For example, viewability across RMNs was found to be 8% lower than the DV viewability benchmark. This discrepancy reflects the strategic focus of ecommerce platforms, which prioritise enhancing the user shopping experience and maximising conversions, with advertising viewability optimisation often a secondary consideration.
Offsiteadvertising
Though onsite has historically enjoyed greater attention, offsite is growing. With ad spend on offsite programmatic retail media estimated to hit $20 billion this year, a sharp increase on the $7.5 billion recorded in 2023. Major media players are already working with big retail media networks to deliver CTV campaigns with the flexibility and precision advertisers are demanding.
While offsite strategies can provide access to multichannel data and reach audiences wherever they are, venturing offsite can also bring some quality challenges. Offsite retail media inventory compares favourably to onsite in terms of higher viewability rates and levels of exposure, but has a higher chance of brand suitability violations and lower engagement than O&O inventory.
Channel of the future?
In 2024, CMOs are being asked to demonstrate the performance of their media investments and prioritise business outcomes over traditional digital metrics such as reach and frequency. No matter what happens elsewhere in the digital ad marketplace, retail media and its unique capabilities are likely to remain high on marketers’ agenda for some time to come.
Retail media offers an exciting and high performing vertical for advertisers to engage with their customers. However, brand marketers would be wise to remember that not all retail media inventory is created equal. Advertisers should look to gain standardised measurement across all retail media campaigns to ensure their strategies are as effective and efficient as possible.
About the author: Nick Reid is SVP and Managing Director EMEA at DoubleVerify, a software platform for digital media measurement and analytics.
